Wednesday, January 27, 2016

Disclosure of Cash Real Estate Purchases

The purchase of real estate without bank financing presents an opportunity for those with unclean funds to launder those funds and make them appear legitimate, at least in the opinion of the Financial Crimes Enforcement Network (FinCEN). This is especially so if the buyer is an entity such that the ultimate individual owner is hidden from public view.
To combat this, earlier this month FinCEN issued Georgraphic Targeting Orders that will require some U.S. title insurance coompanies to identify the natural persons behind companies that make all cash purchases of residential real estate in Manhattan and Miami-Dade County.
Obviously, this is not a comprehensive disclosure dragnet, and it is only temporary. So it would appear that this is either a fact finding exercise and/or an in terrorem warning to potential money launderers that FinCEN is on their case.
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