The Financial Crimes Enforcement Network (FinCEN) issued an initial Geographic Targeting Orders (“GTOs”) in January 2016. The purpose of the GTO is essentially to prevent money laundering and threats to national security in real estate transactions. “Covered Businesses,” such as certain title insurance un¬derwriters, their subsidiaries and agents, have reporting obligations under the GTOs in any transaction which included the cash purchase of residential property lo¬cated in (1) Miami-Dade County for $1 million or more, or (2) the Borough of Manhattan for $3 million or more.
However, based upon review of reported data from the first GTOs, FinCEN issued a second series of GTOs in July 2016. The GTOs focus on Cov¬ered Transactions with closing dates beginning on Aug. 28, 2016 and ending on Feb. 23, 2017, and are significantly more expansive than the first GTOs in several respects. For example:
- The second GTOs were issued to all title insurance underwriters;
- The second GTOs de¬fine Covered Transactions to include not only the cash purchase of residential property located in Miami-Dade County for $1 million or more and in the Borough of Manhattan for $3 million or more, but also:
- Property located in Broward and Palm Beach Counties for $1 million or more,
- Property located in Bex¬ar County, Texas for $500,000 or more,
- Property located in the Bor¬oughs of Brooklyn, Queens, Bronx and Staten Is¬land, New York City for $1.5 million or more, and
- Property located in the counties of San Diego, Los Angeles, San Fran¬cisco, San Mateo, and Santa Clara, California for $2 million or more.
- The definition of Covered Transaction now includes purchases made, at least in part, using a per¬sonal check or business check.
If you are contemplating purchasing property in South Florida, make sure your attorney/title agent is prepared to comply with these important obligations. If you are unsure of whether these obligations are applicable to your purchase, please do not hesitate to contact us. Storrings Law is here to help.