FinCEN Renews Geographic Targeting Orders for Residential Real Estate Deals

On October 15, 2024, the U.S. Department of the Treasury's Financial Crimes Enforcement Network ("FinCEN") announced a six-month renewal of the existing Geographic Targeting Orders ("GTOs") relating to money laundering concerns in connection with all-cash purchases of high-end residential real estate properties. The GTOs were originally issued in January 2016 and have been reissued several times, most recently in April 2024. They require U.S. title insurance companies to identify and report the ultimate beneficial owners behind legal entities making certain all-cash real estate purchases. The renewed GTOs remain in the same form and continue to cover major metropolitan areas in thirteen states and the District of Columbia. The renewed GTOs took effect on October 16, 2024, and will remain in effect for a period of six months, until April 14, 2025.

The GTOs remain significantly expanded from the initial January 2016 GTOs that targeted only two real estate markets-New York and Miami. The renewed GTOs require U.S. title insurance companies to identify the natural persons who are the ultimate beneficial owners of limited liability companies, partnerships, and other legal entities involved in all-cash residential real estate sales in the following locations:

• San Diego, Los Angeles, San Francisco, San Mateo, and Santa Clara counties in California;
• Adams, Arapahoe, Clear Creek, Denver, Douglas, Eagle, Elbert, El Paso, Fremont, Jefferson, Mesa, Pitkin, Pueblo, and Summit counties in Colorado;
• Fairfield and Litchfield counties in Connecticut;
• The District of Columbia;
• Miami-Dade, Broward, Palm Beach, Hillsborough, Pasco, Pinellas, Manatee, Sarasota, Charlotte, Lee, and Collier counties in Florida;
• The city of Honolulu and Hawaii, Maui, Kauai, and Honolulu counties in Hawaii;
• Cook County in Illinois;
• The city of and county of Baltimore and Montgomery, Anne Arundel, Prince George's and Howard counties in Maryland;
• Suffolk, Middlesex, Bristol, Essex, Norfolk, and Plymouth counties in Massachusetts;
• Clark County in Nevada;
• The five boroughs of New York City;
• Bexar, Tarrant, Dallas, Harris, Montgomery, Webb, and Travis counties in Texas;
• King County in Washington; and
• Arlington and Fairfax counties, and the cities of Alexandria, Falls Church, and Fairfax in Virginia;

With the exception of Baltimore, where the purchase price threshold is set at $50,000, the threshold for each of the new and renewed GTOs is set at $300,000. FinCEN apparently finds value in setting this threshold at a relatively low amount across the board, given that the geographical scope includes some of the most expensive real estate markets in the country. Virtual currency remains a targeted payment method under the renewed orders. FinCEN has provided a sample GTO and Frequently Asked Questions about the GTOs.

In August 2024, FinCEN issued a final rule that will require reporting of non-financed transfers of residential real estate. This rule, which will apply nationwide and with no minimum dollar value threshold, will replace the current GTO program when it takes effect in December 2025. Until that time, FinCEN apparently intends to keep the GTOs in force.

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