Editor's note, updated August 19, 2026: This article was originally published while the FinCEN Residential Real Estate Rule was in effect. On March 19, 2026, the U.S. District Court for the Eastern District of Texas vacated the rule nationwide in Flowers Title Companies, LLC v. Bessent. Reporting persons are not currently required to file Real Estate Reports. The government has appealed to the Fifth Circuit, where briefing is underway, so the rule could be reinstated. This article has been updated to reflect the current status. If you are purchasing through an entity or trust, confirm the current requirements with your closing attorney before you close.
Buying Florida real estate with cash through an LLC or Trust? Understand what happened to the FinCEN reporting rule, why it is not currently in force, and what entity buyers should still be prepared for.
A significant new rule from the Financial Crimes Enforcement Network, commonly referred to as FinCEN, took effect on March 1, 2026. It was vacated nationwide eighteen days later and is not currently in force. The full sequence is below, because it matters for anyone who closed during that window. The Residential Real Estate Rule (31 CFR § 1031.320) required settlement agents, title attorneys, and closing attorneys to file a Real Estate Report for what the government defines as a "covered transaction."
Under the rule as written, a transaction was reportable when all three conditions were met: the property is U.S. residential real property designed for one to four families, including vacant land intended for residential construction; the transfer is non-financed, meaning all-cash, seller-financed, hard money, or financed by a lender without anti-money laundering obligations; and the buyer or transferee is an entity or trust — an LLC, corporation, partnership, estate, or trust — rather than a natural person. There is no minimum purchase price threshold, meaning even a zero-dollar transfer with no consideration can be reportable.
The rule was originally scheduled for December 1, 2025, but was postponed to March 1, 2026. It then went in two directions at once. On February 19, 2026, the Middle District of Florida upheld it, finding that FinCEN had acted within its rulemaking authority. One month later, on March 19, 2026, the Eastern District of Texas reached the opposite conclusion and vacated the rule nationwide, eighteen days after it had taken effect. FinCEN appealed, and the Department of Justice filed its opening brief in the Fifth Circuit on August 17, 2026. As of today, reporting persons are not required to file Real Estate Reports.
FinCEN had established a seven-tier reporting cascade under which only one person per transaction would file the report: the closing or settlement agent listed on the closing statement, the person who prepares the closing statement, the person who files the deed, the person who underwrites owner's title insurance, the person who disburses the greatest amount of funds, the person who provides title status evaluation, or the person who prepares the deed. In most Florida transactions, this responsibility falls on the title company or settlement agent. Written designation agreements can reassign responsibility, and real estate agents are generally not considered reporting persons.
The Real Estate Report, filed electronically through FinCEN's BSA E-Filing System, captures extensive information: details about the reporting person, the property, the seller, the buyer entity or trust, beneficial ownership information for anyone exercising substantial control or owning at least 25 percent of ownership interests, signing individuals, and payment details including total consideration, payment method, and banking information. The filing deadline was 30 calendar days after closing or the last day of the month following closing.
Florida is disproportionately affected due to its high volume of all-cash transactions, heavy use of LLC structures for asset protection and privacy, and significant foreign buyer activity. Current FR/BAR contract forms still contain FinCEN compliance language at Section 18.I.(iii). That language was drafted while the rule was in force and remains in the printed form, which is a common source of confusion at the closing table right now. Even routine transactions, such as a couple transferring a vacation home into their LLC, would have triggered reporting even when no money changes hands and beneficial ownership is unchanged.
While the rule was in force, the penalties were significant: negligent violations carried fines of up to $1,394 per violation, a pattern of negligent activity up to $108,489, and willful violations up to five years of imprisonment and $250,000 in fines, with a five-year record retention requirement. None of these currently apply, because there is no active filing obligation. They would return if the Fifth Circuit reinstates the rule.
Certain transfers are exempt, including those resulting from death, divorce, bankruptcy, court supervision, and certain estate planning trust transfers. The rule operates independently from the Corporate Transparency Act, meaning that even though a March 2025 interim final rule exempted U.S.-formed domestic entities from CTA reporting, the FinCEN real estate rule's beneficial ownership disclosure requirement applies independently to all covered transactions.
The practical advice has not changed much, and the reason is the appeal. If the Fifth Circuit reinstates the rule, the obligation returns without a long runway. Investors buying through an LLC, trust, or other entity are still well served by having operating agreements, articles of organization, trust documents, and beneficial ownership information organized before going under contract. That documentation is worth having for lender, title, and banking purposes regardless of what FinCEN requires, and it costs nothing to be ready. Ask your closing agent what its current position is, because practice varies while the rule is on appeal.
Contact our office at nicole@nicole-jordan.com to schedule your consultation and discuss this in more detail.
