Just Like That; FinCEN's Required Real Estate Reporting Is Over Almost Before it Started, For Now

As we reported in our blog post of February 24th earlier this year, FinCEN instituted a new rule requiring reporting of parties in certain residential real estate transactions starting March 1. However, a recent decision in Flowers Title Companies, LLC v. Bessent, et al., 25-cv-127 (E.D. Tex.) put a stop to that.

Plaintiff Flowers Title Companies, LLC filed a case challenging the Residential Real Estate Rule under the Administrative Procedure Act (APA), arguing FinCEN lacked authority under the statutes to impose the reporting requirements.  After briefing, Judge Jeremy Kernodle of the U.S. District Court for the Eastern District of Texas granted summary judgment in favor of Plaintiff on March 19. Judge Kernodle vacated the rule (universally, not just for the Plaintiff), as exceeding FinCEN’s authority. To read the thrilling Memorandum Opinion and Order, click here.

In what could turn out to be the same back and forth wrangling of the Corporate Transparency Act, it is suspected that the government will seek to stay the vacatur and/or appeal.  For now, FinCEN has posted an alert on the reporting page advising no reporting is currently required.