FinCEN Geographic Targeting Order
The United States Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”), In yet another endeavor to detect real estate money laundering, has issued a Geographic Targeting Order (“GTO”) creating new reporting requirements, effective August 28, 2016 through February 23, 2017., that will affect real estate transactions in the five boroughs of New York (though not Nassau or Suffolk), in addition to counties in California, Florida and Texas.
This GTO defines a “covered transaction” as one where:
1. A legal entity, such as a Corporation, LLC, Partnership or like business entity, purchases residential real estate (including condominiums and cooperatives), designed principally for the occupancy of one to four families for a total purchase price of $1,500,000.00 in the boroughs of Brooklyn, Queens, Bronx and Staten Island; or $3,00,000.00 in the borough of Manhattan.
2. Said purchase is made without a bank loan or external financing.
3. Said purchase is made, at least in part, using currency, or any form of check
4. or money order.
The GTO requires that IRS/FinCEN Form 8300 be utilized to disclose such things as:
1) The identity of the Purchaser
2) The identity of the Beneficial Owners of the Purchaser
3) The identity of the attorney representing the Purchaser
Be advised that the GTO sets forth specific instructions for completing the Form 8300, many of which supersede the preprinted instructions on Form 8300. When reporting instructions in the GTO conflict with the preprinted instructions, the terms of the GTO apply.
All title reports issued by Abstracts Incorporated for property situate in the affected counties, for the period 8-28-2016 through 2-23-2017 will contain an exception stating that “This transaction may be subject to the FinCEN Geographic Targeting Order affecting real estate transactions….etc.”
Please be advised that Abstracts Incorporated will be providing a copy of the FinCEN GTO “Determination Worksheet” for all relevant transactions at the time of closing, forms will also be available for download from the company website at www.AbstractsInc.com. If you have any additional questions concerning this GTO, please contact either Peter Calvanese or Tom Turano at 516-683-1000.
Should you have any questions or concerns, please feel free to call upon us.
August 12, 2016