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Federal Reporting Requirements On Certain Real Estate Transactions
The Financial Crimes Enforcement Network (FinCEN) is a bureau of the United States Department of the Treasury that collects and analyzes information about financial transactions in order to combat domestic and international money laundering, terrorist financing, and other financial crimes. Over the last year FinCEN has been issuing Geographic Targeting Orders (“Orders”) requiring the reporting of information regarding certain real estate transactions.
On August 28, 2016, an Order went into effect impacting five counties in California, namely Los Angeles, San Diego, San Francisco, San Mateo and Santa Clara Counties. Under the Order, title companies are required to report specific information about the individuals conducting the transaction if certain criteria are met. The covered transactions are sales of properties in the amount of $2,000,000 or more, wherein the property being sold is residential. They buyer must also be a legal entity, paying all cash (no loan), wherein any portion of the funds paid toward the purchase price were not wired.
This Order is currently in effect through September 16, 2018. If you are involved in any such transactions during this time period be prepared to provide the information required by the title company to meet this reporting requirement. paragraph here.