The Financial Crimes Enforcement Network – FinCen GTO

Miami Dade 2

 

This past January 2016, The Financial Crimes Enforcement Network (“FinCEN”), which is a division of the U.S. Department of Treasury, issued a Geographic Targeting Order (“GTO) which will impact sales of residential property throughout Florida’s Southeast. The January GTO applies to the sale of residential property located in Miami-Dade County for $1,000,000 or more, closing on or after March 1, 2016, through August 27, 2016, where the buyer is a legal entity and the purchase is made without a bank loan. This GTO was extended on July 22, 2016 to include Palm Beach and Broward counties, and also includes transaction when a personal or business check is used for any portion of the purchase price. The July 22, 2016 GTO commences with closings on or after August 28, 2016 through February 23, 2017.

All offices and agents of various title insurance underwriters are now required to collect and report information respecting certain real property purchases which meet all of the following parameters: (1) Sale of residential property located in Miami-Dade, Palm Beach or Broward County; (2) Sale completed on or after August 28, 2016, through February 23, 2017; (3) Sales price of $1,000,000 or more; (4) The buyer is a legal entity, such as a limited liability company, corporation, partnership, or similar business entity but not a trust; (5) Purchase is made without a bank loan or other similar form of external financing (financing by a financial institution that is required to have an anti-money laundering policy); and (6) Purchase price is paid, in whole or in part, with cash, cashier check, certified check, travelers check, money order in any form, personal or business check. This does not include a sale where the purchase price is paid entirely by wire transfer.

It’s important to note that title insurance commitments for a transaction which falls under the GTO must contain specific language found in Schedule B-1 of the GTO. Furthermore, these transactions must be reported to FinCEN by filing a FinCEN Form 8300 within 30 days after closing and a representative of the buying entity must complete, and have notarized, a Supporting FinCEN GTO Affidavit. Carefully following the requirements of the January and July GTOs will ensure your organization completes all Southeast Florida closings without incident.

 

By Chris Pavlidis, Esquire

Gilbert Garcia Group, P.A.

 

 

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