Title insurance companies’ reporting threshold lowered to $300,000
Title insurance companies in 12 of the nation’s largest markets will now have to provide federal authorities with substantial details on all real estate deals of $300,000 or more if the buyer is paying all cash.
The requirement comes at the hands of the Treasury Department’s Financial Crimes Enforcement Network (FinCEN), which is significantly expanding its investigation into whether foreign buyers are using shell companies to buy U.S. real estate in order to launder money.
The initial investigation looked at unknown buyers using shell companies to buy high-end real estate in Manhattan and Miami – Dade County, because the government was “concerned about illicit money” being used in the deals. The results of that initial investigation showed more than 25% of transactions covered in the initial inquiry involved a “beneficial owner” who is also the subject of a “suspicious activity report,” which is an indication of possible criminal activity.
Throughout the investigation, FinCEN focused on luxury real estate, setting the reporting thresholds for title companies at $500,000 or above. Now, FinCEN is dramatically lowering the reporting threshold. Going forward, title companies in Boston; Chicago; Dallas-Fort Worth; Honolulu; Las Vegas; Los Angeles; Miami; New York City; San Antonio; San Diego; San Francisco; and Seattle will all be required to report on the person behind shell companies on all-cash deals of $300,000 or more.
FinCEN is also now requiring title companies to report on purchases above that threshold that are made using cryptocurrency, as well.