New Disclosure Rules to Affect Cash Buyers in NYC and Miami

By Gill South via Inman

Key Takeaways

· From today, March 1 until August 27, title insurance companies in Manhattan and Miami and will have to identify the individuals behind LLCs buying real estate for cash.
· The ruling is just for Manhattan and Miami-Dade county but is part of a global move to put a stop to money laundering.
· The American Land Title Association has called for constant communication between all parties in the real estate transaction.

Starting today, luxury buyers wanting to pay in cash will no longer be able to hide behind an LLC in Manhattan or Miami-Dade County.

Real estate agents in those areas will be watching closely as rules from the U.S. Department of Treasury are implemented, requiring title companies to report certain buyer’s identities in high-end cash real estate transactions.

The ruling is designed to collect new data on cash buyers and act as an extra barrier to money laundering. Parties structuring or assisting in structuring a transaction to avoid the currency transaction reporting will receive a fine and up to five years in prison.

The Rules

The Financial Crimes Enforcement Network (FinCEN) has said that title insurance underwriters in Manhattan and Miami-Dade County will have to identify “natural persons with 25 percent of greater ownership” in a legal entity making an all-cash real estate purchase of more than $3 million in Manhattan or $1 million in Miami-Dade County.

If the purchase is made entirely by a wire transfer or personal or business check, the reporting requirements do not apply.

If, however, any portion of the purchase price is paid using currency or a cashier’s check, certified check, traveler’s check or money order, it must be reported.

Learn more by clicking here or reaching out to a Chilton & Chadwick team member.