U.S. Title Insurers Required to Identify High-End Cash Buyers in 6 Major Metropolitan Areas Share
September 1, 2016
Breaking News! If you are buying a residential property in San Diego County in an LLC, and its all cash and the sales price is over $2,000,000 then there will be extra steps that you will have to do before the property can close.
Why? The Financial Crimes Enforcement Network (FinCEN) announced Geographic Targeting Orders (GTO) that will temporary require U.S. Title Insurance Companies to identify the natural persons behind shell companies used to pay “all cash” for high-end residential real estate in six major metropolitan areas such as: Manhattan, Miami-Dade County and now San Diego County, Los Angeles County and San Francisco County.
One of the main reasons FinCEN is doing this is the concern that all-cash purchases (i.e without banking financing) may be conducted by individuals attempting to hide their assets and identity by purchasing residential properties through limited liability companies or other opaque structures.
Title Insurances Companies will be required to file a FinCen form 8300 on all Covered Transactions, including information about the identity (driver’s license, passport, or other similar documentation) of the individual primarily responsible for representing the purchaser, the purchaser(s), the beneficial owner(s) of the purchaser.
Please note that this applies to any transaction where such purchase is made, at least in part, using currency or a cashier’s check, a certified check, a traveler’s check, a personal check, a business check or a money order in any form. On an all cash transactions with an outside escrow, title will need to inquire with the outside escrow and receive written affirmation from escrow as to how the funds were deposited in escrow. Transactions where 100% of the purchase funds were deposited by wire are not included in this order.
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