Due to the consistently high level of crimes being reported within the real estate industry, the
Director of the Financial Crimes Enforcement Network, referred to as FinCEN, has renewed the Geographic Targeting Order (GTO) that was first issued in 2016. This new order went into effect on October 22, 2023, and will remain in effect until April 18, 2024.
Let’s take a look at what this means for title companies throughout the United States – and how it will impact buyers, sellers, and investors.
What is the Geographic Targeting Order?
Millions of dollars are lost every year due to real estate fraud. The renewal of the GTO, which collects information about certain real estate transactions, will allow FinCEN to continue its efforts with law enforcement agencies to track and reduce money laundering and other illegal activity within the industry.
The purpose of the GTO is to identify the individuals involved in these crimes.
With the exception of those who are located in the expanded coverage areas, title companies will face no additional obligations as a result of this order. They will be required to report specific information concerning real estate transactions that are covered under the GTO, just as they have done previously.
Not all transactions are going to need to be reported. FinCEN is looking for the details for residential property purchases of $300,000 ($50,000 in the City and County of Baltimore) or more that are paid, either in full or in part, by something other than traditional financing through a bank, such as:
- Cash
- Personal checks
- Business checks
- Money orders
- Virtual currency
The GTO is focused on residential real property, which refers to real property that can be designed for single or multi-family (up to four families). This includes single-family homes, duplexes, condominiums, cooperatives, and the like.
Title companies and their agents need to take the necessary steps to ensure they are up-to-date on the newly renewed order so that they remain in compliance
Anyone who has questions about the GTO can find more information in FinCEN’s newly updated FAQs.
Who is Impacted By the Geographic Targeting Order?
As these recent changes with the Geographic Targeting Order are put in place, who do they impact? What old and new jurisdictions across the U.S. will be following through with the reporting requirements?
The jurisdictions that fall under the expanded GTO are listed below.
- California: San Diego, Los Angeles, San Francisco, San Mateo, or Santa Clara Counties
- Colorado: Adams, Arapahoe, Clear Creek, Denver, Douglas, Eagle, Elbert, El Paso, Fremont, Jefferson, Mesa, Pitkin, Pueblo, or Summit Counties
- Connecticut: Fairfield or Litchfield County
- District of Columbia
- Florida: Miami-Dade, Broward, or Palm Beach, Hillsborough, Pasco, Pinellas, Manatee, Sarasota, Charlotte, Lee, and Collier Counties
- Hawaii: City and County of Honolulu, Maui, and Kauai
- Illinois: Cook County
- Maryland: Montgomery, Anne Arundel, Prince George’s or Howard Counties, Baltimore City and County.
- Massachusetts: Suffolk or Middlesex, Bristol, Essex, Norfolk, and Plymouth Counties
- Nevada: Clark County
- New York: Boroughs—Brooklyn, Queens, Bronx, Staten Island or Manhattan
- Texas: Bexar, Tarrant, Dallas, Montgomery, Harris, or Web, Travis Counties
- Virginia: Arlington or Fairfax Counties; or the cities of Alexandria, Falls Church, or Fairfax
- Washington: King County
The penalties for noncompliance with this GTO are severe: “The Covered Business, and any of its officers, directors, employees, and agents, may be liable, without limitation, for civil or criminal penalties for violating any of the terms of this Order.”
What Does the GTO Mean for Buyers, Sellers, and Investors?
Residential sellers and buyers as well as commercial investors, can all rest easy when it comes to the renewed GTO – as long as legitimate funds are used and no criminal activity is taking place.
This order is for reporting purposes only by the title company and its agents.
Find More Answers at Loudoun Commercial Title, LLC
At Loudoun Commercial Title, LLC, we work hard to make sure we have a thorough understanding of anything that impacts what we do. This includes FinCEN’s renewed GTO.
Whether you have questions about the order or are simply looking for a trusted and experienced title company to handle your real estate transaction, contact us at (703) 737-3800.