The Financial Crimes Enforcement Network ("FinCEN") reissued a Geographic Targeting Order ("GTO") requiring title insurance companies to collect and report beneficial ownership information for certain real estate purchases. The reissued GTO applies when a legal entity purchases residential real estate in specified areas, the purchase price is $300,000 or more, and the transaction does not involve a bank loan or similar external financing. Previously, the purchase amount threshold varied by city.
The new GTO adds Boston, Chicago, and Las Vegas to the list of specified areas, which also includes Dallas-Fort Worth, Honolulu, Los Angeles, Miami, New York City, San Antonio, San Diego, San Francisco and Seattle.
The GTO goes into effect on November 17, 2018.
Commentary / Christian Larson
This GTO vastly expands the scope of beneficial ownership reporting required for real estate purchases. FinCEN's initial real estate GTOs, issued in January 2016, required reporting only for purchases over $3 million in Manhattan and over $1 million in Miami. Subsequent iterations broadened the specified areas in New York and Florida, and added new cities in other parts of the U.S. The latest GTO adds three new cities and applies also to purchases involving virtual currency. Most significantly, however, the GTO drops the reporting threshold to $300,000 for all geographic areas. FinCEN is now looking beyond the luxury market and seeking information on a much broader range of buyers.
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