Thought Leadership

An End to the Geographic Targeting Order and Reporting Requirements for Cash Purchases of Real Estate? Not Likely.

The current Geographic Targeting Order (GTO), issued by the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of Treasury, is set to expire this Friday, November 16, 2018.  In essence, the GTO provides that when a buyer uses a corporate entity (such as an LLC) for cash purchases of residential real estate in South Florida of over $300,00 (i.e., the buyer does not finance the purchase with a bank—not that he has an actual suitcase full of cash), there are burdensome reporting requirements for the buyer and closing agent. There also have been various GTOs in place in parts of New York City, San Francisco, and San Diego.

Potential buyers, real estate brokers, real estate lawyers, and title companies all need to be aware of the specific GTO requirements that apply when working on high-end (over $300,00) residential real estate transactions.

Media commentators have often labeled the GTOs issued by FinCEN as a purported crackdown on potentially “dirty” money purchases of residential real estate by shell companies in these geographic areas.  Despite the connotations in the media, there are many legitimate reasons buyers acquire andown residential real estate with a corporate entity and without bank financing, such as estate planning, co-ownership, or tax planning.

Even though the current Federal Government administration has taken “anti-regulation” positions on many topics, there has yet to be strong and organized lobbying interests against the GTOs imposed by FinCEN. The GTO regulation has been labeled “temporary” in nature, but FinCEN and the U.S. Government have already renewed it multiple times, and most people in the real estate industry expect it to be renewed, once again, before it is set to expire on Friday, November 16, 2018.

admin

Recent Posts

Take Care of Your Unit

While some owners may reside in their condominium units seasonally, it is always important for…

1 day ago

Miami condo termination blocked after Florida Supreme Court ruling

Two Roads Development’s efforts to terminate and demolish a Miami condo remains blocked after a…

2 weeks ago

FL Supreme Court Denies Two Roads Rehearing in Buyout Case

Miami and West Palm Beach-based Two Roads has long planned to develop an Edition Residenceson…

2 weeks ago

Florida Condo Owners Score Legal Victory in Fight Over $35,000 Special Assessment

The owners and condo board at 1060 Brickell Condos, a two-tower, 45-story luxury high-rise in…

2 weeks ago

Brickell condo owners notch big win in legal battle with association – The Real Deal

Court ordered the association, led by Jacob Kassel. to turn over control, records to winners…

3 weeks ago

Avila v. Biscayne 21: Third District Reinforces Declaration Unanimous Consent Requirements for Condominium Terminations

The Florida Third District Court of Appeal’s revised opinion in Avila v. Biscayne 21 Condo.,…

4 weeks ago