Involved in a Cash Sale? See If New Rules Affect You
Real Estate attorney Stuart Saft was interviewed by Real Estate News about a federal rule imposing new requirements on parties involved in closing certain residential real estate transactions. The U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) unveiled a regulation late last month mandating settlement agents, employees of title companies, licensed attorneys and real estate brokers to file suspicious activity reports for non-financed transfers of residential real estate between holding companies and trusts. With the new rules, FinCEN aims to clamp down on illicit activity that could slip through the enforcement cracks, as all-cash sales are not subject to the same anti-money laundering and countering the financing of terrorism (AML/CFT) requirements as those including a mortgage.
Mr. Saft commented the rules could create headaches for law enforcement sifting through the "huge additional intake" of suspicious activity reports. However, he added, title insurance and closing companies — the entities tasked with filing the reports — could see a "windfall" in business.
"If structured properly, it's likely to present real business opportunities because it will be less likely that law firms continue to do this work," he explained.