I saw this on the most recent Title Commitment and thought it was worthy of a Q&A…
“This transaction may be subject to the FinCEN Geographic Targeting Order affecting residential sale transactions. This issuing agent must be provided with information prior to closing sufficient to determine if IRS/FinCEN Form 8300 must be completed and filed and must be provided information sufficient to meet the records retention requirements of the FinCEN Geographic Targeting Order. This transaction will not be insured, and this issuing agent and/or its underwriter
will not be involved in a Covered Transaction (as defined by FinCEN Geographic Targeting Order) until this information is submitted and reviewed by the issuing agent.”
So, what is this?
This a note in the Title Commitment to ensure compliance with a new anti money laundering rule. Historically, south Florida has been a place where money in laundered through real estate. To combat this the Financial Crimes folks and the IRS have implemented a rule to report to them the true identity of those buying residential real estate though entities such as LLC’s for any “Covered Transaction” which would include a sale in excess of 1M in Palm Beach County where there is no financing AND “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.”
For purposes of this Order, a “Covered Transaction” means a transaction in which:
i. A Legal Entity (as defined in Section III.A of this Order);
ii. Purchases residential real property:
1. For a total purchase price of $500,000 or more in the Texas county of Bexar;
2. For a total purchase price of $1,000,000 or more in the Florida county of Miami-Dade, Broward, or Palm Beach;
3. For a total purchase price of $1,500,000 or more in the Borough of Brooklyn, Queens, Bronx, or Staten Island in New York City, New York;
4. For a total purchase price of $2,000,000 or more in the California county of San Diego, Los Angeles, San Francisco, San Mateo, or Santa Clara; or
5. For a total purchase price of $3,000,000 or more in the Borough of Manhattan in New York City, New York; and
iii. Such purchase is made without a bank loan or other similar form of external financing; and
iv. 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.