Treasury dramatically sharpens LLC disclosure rules

All-cash LLC purchases above $300K are now subject to law

TRD NATIONAL /
Nov.November 15, 2018 04:30 PM

(Credit: iStock)

The Treasury Department drastically increased the number of all-cash deals that are subject to its anti-money laundering rules on Thursday.

Starting Nov. 17, title insurance firms will be required to disclose the identity of LLC buyers who spend $300,000 or more on the real estate purchase.

Previously, the rule applied to cash deals above $3 million in Manhattan and $1.5 million in New York City’s other boroughs. The threshold was $2 million in Los Angeles, San Francisco and San Diego; $1 million in Miami-Dade, Broward and Palm Beach counties in Florida; and $500,000 in San Antonio, Texas.

The government’s Financial Crimes Enforcement Network (FinCEN) disclosed the revised rules Thursday. Like previous Geographic Targeting Orders (GTOs), the onus is on title insurance companies to comply with the order. Purchases using virtual currency are now also covered by the GTO.

The ruling applies to 12 major metro areas including New York City, Miami, Los Angeles, Chicago, San Francisco, Boston, Dallas-Fort Worth, Honolulu, Las Vegas, San Antonio, San Diego and Seattle.

FinCEN initially launched the LLC disclosure rule in March 2016 in an attempt to stop the flow of dirty money into real estate, but critics have long said the rules have gaping loopholes.

In May, FinCEN re-upped the rules but instructed title companies not disclose details of the new rules.


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