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New Law would expand Florida FinCEN Real Estate Transparency Requirements Nationwide

Mar 18, 2019

In January 2016, FinCEN, a bureau of the U.S. Department of the Treasury, issued a Geographic Targeting Order that required all title insurers to report the identity of the “beneficial owners” in all-cash real estate transactions in Miami-Dade County when the purchase price exceeded $1 million.

The goal was to prevent criminals and sanctioned individuals from hiding their identities behind LLCs and laundering their money via real estate.

In July of 2016, FinCEN expanded the Geographic Targeting Order to Broward and Palm Beach counties, also for all-cash purchases of $1 million or more. In September of 2017, the order was expanded once again to include wire purchases.

The most dramatic escalation occured in November of 2018, when all-cash LLC purchases above $300K were declared subject to additional reporting requirements nationwide. The problem with Geographic Targeting Orders is they aren’t laws. They expire and must constantly be renewed. Meanwhile, criminals and sanctioned individuals have time to react and change their tactics.

But now Congress is aiming to take the program nationwide once and for all.

Proposed Transparency Requirements for Real Estate Purchases

The proposed Corporate Transparency Act of 2019 would require all anonymous LLCs nationwide to disclose their beneficial owners — removing a prime money laundering tool used by criminals and sanctioned individuals and creating new compliance requirements for the real estate and title industries.

As it stands, exactly who title companies would report the beneficial owners to is undecided. The bill in its current form has reporting going to FinCEN, who would then share the identities with financial institutions and law enforcement, but other proposals where reporting would be made to the IRS have also been proposed.

If passed, this bill or one like it would have a huge impact on the real estate industry. We’ll keep you posted!

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