On October 26, 2022, the Financial Crimes Enforcement Network (“FinCEN”) renewed and expanded geographic targeting orders (“GTOs”) for certain “all-cash” purchases of residential real estate (“October 2022 GTOs”).1 The October 2022 GTOs remain in effect until April 24, 2023, but are likely to be renewed based on FinCEN’s prior practices.
Since 2016, FinCEN has issued a series of increasingly expansive GTOs that require US title insurance companies to identify the natural persons behind legal entities (US and non-US) used in certain “all-cash” purchases of residential real estate. (Please see our earlier Legal Updates for background on the real estate GTOs.2)
October 2022 GTOs
The October 2022 GTOs further expand the scope of the earlier GTOs by adding the counties that encompass the Texas cities of Houston and Laredo to the identification and reporting requirements for all-cash transactions of a certain dollar value. The requirements become effective in the new areas on November 25, 2022.
Takeaway
The October 2022 GTOs are consistent with FinCEN’s broader initiative to identify and remediate vulnerabilities in the US real estate market and track with the GTOs issued since 2016. Further, they may be a semi-permanent action while FinCEN considers a separate rulemaking for permanent recordkeeping and reporting requirements for certain persons participating in transactions involving the non-financed purchase of real estate nationwide.3 That rulemaking remains in its early stages and will likely involve at least one more round of public comment. Therefore, we expect more extensions of the real estate GTOs and other similar piecemeal actions until FinCEN completes the rulemaking process.
Footnotes
1 FinCEN Renews and Expands Real Estate Geographic Targeting Orders (Oct. 26, 2022), https://www.fincen.gov/news/news-releases/fincen-renews-and-expands-real-estate-geographic-targeting-orders-0.
2 FinCEN Continues to Renew and Expand Real Estate GTOs (May 11, 2022), https://www.mayerbrown.com/en/perspectives-events/publications/2022/05/us-fincen-continues-to-renew-and-expand-real-estate-gtos; FinCEN Adds Virtual Currency to High-End Real Estate Reporting Regime (Nov. 20, 2018), https://www.mayerbrown.com/en/perspectives-events/publications/2018/11/fincen-adds-virtual-currency-to-highend-real-estat.
3 For more information, please refer to our previous Legal Update New Real Estate Reporting Requirements Under Consideration by FinCEN (Dec. 8, 2021): https://www.mayerbrown.com/en/perspectives-events/publications/2021/12/new-real-estate-reporting-requirements-under-consideration-by-fincen.
Visit us at mayerbrown.com
Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the “Mayer Brown Practices”). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. “Mayer Brown” and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.
© Copyright 2020. The Mayer Brown Practices. All rights reserved.