The U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN) recently issued a Geographic Targeting Order (GTO) directing Old Republic National Title Insurance Company and its agents to report information about certain residential real estate transactions in Miami-Dade County. The purpose of the GTO is to help FinCEN and other federal agencies identify potential money laundering. FinCEN has the authority to compel these reports under the USA PATRIOT Act.
A copy of the GTO can be found here. As shown in that document, the reporting requirement only applies to so-called "Covered Transactions." These Covered Transactions include any real estate transactions that meet all of the following criteria:
The transaction involves residential real estate in Miami-Dade Country, Florida.
The purchase price exceeds $1 million.
The purchaser is a corporation, limited liability company (LLC), partnership, or other similar legal entity. (The definition does not include natural persons or trusts.)
The purchaser purchases the real estate without a bank loan or other similar form of institutional financing.
The purchaser pays any part of the purchase price using currency, cashier's checks, certified checks, traveler's checks, or money orders. (Business checks, personal checks, and wire payments do not trigger the reporting requirement.)
If a transaction meets all these required elements, then settlement agents must complete FinCEN Form 8300 and forward it to Old Republic Title for filing. These changes take effect on March 1, 2016 and continue through August 27, 2016 (unless extended by FinCEN). Agents must provide all of the information required under the GTO on that form. This includes identifying information for: (1) each natural person owning at least 25 percent or more of the business entity purchasing the property, or (2) all natural persons if the purchaser is an LLC.
Agents may download a fillable FinCEN Form 8300 in PDF format using the following hyperlink: https://www.irs.gov/pub/irs-pdf/f8300.pdf. Additional information regarding Covered Transactions and Form 8300 reporting requirements is available in FinCEN's FAQs, which can be found here for your convenience.
To assure compliance with the GTO, all Fund branch products issued for purposes of insuring potentially Covered Transactions will contain a requirement (on a commitment) or an exception (on a title search report). This requirement or exception may be waived by Fund underwriting counsel after they determine that the insured transaction is not subject to the GTO, or upon review and approval of a substantially complete FinCEN Form 8300. Fund Members preparing their own commitments during the relevant time period will receive guidance from Fund underwriting counsel during the commitment approval process.
Please note that any transaction changes that affect FinCEN reporting requirements (such as dropping institutional financing at the last minute), or the information reported (such as the purchase price or how title will be held) will require additional underwriting approval. In transactions where the GTO requirement or exception is waived based on underwriting approval of a substantially complete FinCEN Form 8300, the Fund Member must email a final form together with required documentation to FinCENinfo@thefund.com within one business day of closing.
Please direct any questions regarding Covered Transactions, FinCEN Form 8300, and the associated documentation to underwriting counsel at (800) 432-9594 or email@example.com.
You will be receiving a hard copy of this communication by U.S. mail simply for purposes of complying with the requirements of the GTO concerning delivery to agents.
For your records, please download a PDF copy.