Is Your Client Buying High-End Real Estate In Manhattan? Be Ready To Identify High–End Cash Buyers.
The Financial Crimes Enforcement Network (FinCEN), a bureau of U.S. Department of the Treasury, issued a Geographic Targeting Order (GTO) that require the title companies to identify the individuals behind the LLC’s or companies that purchase all cash real estate in Manhattan worth more than $3,000,000.00. This order currently applies to Manhattan and Miami Dade County, Florida. The purpose is to combat money laundering in the real estate sector in certain high end markets.
Title companies routinely provide title insurance in the industry on purchase of real estate thus allowing for transfer of real estate to take place. Therefore title companies can play a pivotal role in gathering and providing valuable information for FinCEN. The order applies to residential real estate for one to four family occupancy including coops and condominiums. It requires the title company to collect and report the “Beneficial Owner” behind the purchaser, if the purchaser is not an individual. A Beneficial Owner is defined as any individual that directly or indirectly owns 25% of equity interest of the purchaser. This GTO will be in effect for 180 days starting on March 1, 2016 and will expire on August 27, 2016, unless of course it is extended.