New Rules for Title Companies and Residential Real Estate
In an effort to crackdown on money laundering, the FinCEN (Financial Crimes Enforcement Network) has created new reporting rules for title companies aimed at lifting the veil of secrecy surrounding residential real estate transactions.
The terms of the GTOs (Geographic Targeting Orders) are effective beginning April 25, 2023, and ending on October 21, 2023. The purpose of the GTOs is to provide valuable data and ultimately stop or at least hinder the purchase of residential real estate by persons possibly involved in various illicit enterprises. Renewing the GTOs will further assist in tracking illicit funds and other criminal or illicit activity, as well as continuing to inform FinCEN’s regulatory efforts in this sector.
FinCEN’s Geographic Targeting Order requires title companies to report the identities of owners of legal entities like LLCs and corporations that purchase residential real estate—even without external financing. Cash purchases for properties worth $300,000 or higher must be reported, though in some areas of the country, the threshold is lower.