Legal Issues That Matter


FinCEN renews and clarifies GTO

The U.S. Department of Treasury's Financial Crimes Enforcement Network (FinCEN), in its continued efforts to fight money laundering, has renewed, expanded, and clarified its Geographic Targeting Order to Title Agencies, closing attorneys, escrow agents, and title insurance underwriters who handle closing real estate transactions. 

The order is no longer confidential, therefore we're now allowed to share its details with the public. We were not permitted to do this with the previous version of the Order. 

The Order requires that if a closing agent is handling a closing where the purchaser is an entity (LLC, corporation, partnership, limited partnership), there is no mortgage financing being used, and the sales price is $300,000.00 or more in certain jurisdictions, the closing agent must gather the identification information of the shareholders, officers, partners, members, managers, directors, etc. and report it to FinCEN under the Bank Secrecy Act. It's important to note that "Trusts" are no longer considered to be "Legal Entities" that will require reporting of beneficiaries. This is probably because the trustee is already required to file IRS Form 56 that notifies the IRS of the beneficiaries' identification information. 

It's also important to note that the definition of "funds" used for purchase now includes virtual currency along with wires, cashier's checks, ACH, and cash itself.

The following jurisdictions are now covered:

  1. Texas counties of Bexar, Tallant, and Dallas;
  2. Florida Counties of Miami-Dade, Broward, and Palm Beach;
  3. Boroughs of Brooklyn, Queens, Bronx, Staten Island, or Manhattan in New York City, New York;
  4. California Counties of San Diego, Los Angeles, San Francisco, San Mateo, or Santa Clara;
  5. City and County of Honolulu, Hawaii;
  6. Clark County, Nevada;
  7. King County, Washington;
  8. Suffolk and Middlesex Counties in Massachusetts; and
  9. Cook County, Illinois.

When the Order was first initiated, only closings of $3 million or more in New York City and $1 million or more in South Florida were covered, so this is a considerable expansion of coverage since it first rolled out. 

The Order appears to be working at preventing criminals (international and domestic) from using the funds they gain from criminal activities and laundering them through the legitimate activity of purchasing and selling investment real estate. As a consequence, this has also had a negative effect on the market for high-end real estate in many of these jurisdictions.

If you have any questions about the renewed order, please don't hesitate to contact us.


Newlyweds, Re-title your real estate quickly!

Florida Statute Section 201.02, as of July 1, 2018, will waive documentary taxes on deeds between spouses. Currently, if a spouse owns a homestead prior to marriage, and then conveys the homestead to the married couple to take advantage of Florida's tenancy by the entireties protections in addition to the homestead protections, then documentary taxes are assessed based on all outstanding mortgages on the homestead property.

However, as of July 1, 2018, such taxes will not apply to a deed that conveys homestead property between spouses if there is no other consideration being paid between the spouses, and if the deed is recorded within one year after the date of the marriage.

So, if you were recently married, and want to take advantage of the new statute, you better act quickly.


Waiving Spousal Homestead Rights in a Deed

The Florida Legislature has passed, and the Governor has signed, a new law (Section 732.7025, Florida Statutes) that will make it easier for spouses to waive their homestead rights via a deed of the homestead property to the other spouse. 

Effective July 1, 2018, any deeds conveying the homestead that is executed by one spouse to the other, must contain the following statement if the parties are intending that the deed waive the spouse's homestead rights in the property after death:

By executing or joining this deed, I intend to waive homestead rights that would otherwise prevent my spouse from devising the homestead property described in this deed to someone other than me.

With this language on the deed, it clarifies that the grantor spouse intends to waive the homestead rights that spouse has in the homestead when the grantee spouse dies.

For example, currently, if the homestead is held only in the name of the husband at his death, the wife may elect to take a half interest in the property together with the children; alternatively, the wife automatically receives a life estate in the property with the remainder to the children. However, if this clause is in the deed after July 1, 2018, the wife can convey her interest in the homestead to her husband via deed prior to his death so that it is solely in his name; and it's clear that she's waiving her right to own a half interest or at least a life estate in the property automatically when he dies.

The law clarifies that such a waiver by deed does not waive the homestead protection against creditor's claims during and after the owner's death, however. Further, even if such a deed is recorded with this statement on it, the other spouse whose name is no longer on title is still required to sign any future mortgages or deeds for them to be effective against the spouse whose name is omitted.

This begs the question: If a spouse has already conveyed his interest in the homestead solely to his spouse, should a new deed be created and recorded after July 1, 2018, to ensure that their wishes are carried out at death?


New disclosure on deeds in Miami-Dade

Miami-Dade County now requires that, if you are a developer of new residential property in the county, and the property is subject to pending or existing a special taxing district, you must disclose that fact on the face of the deed, conveying the property to the buyer. 

The statement on the face of the deed, must be as follows:


________________________         ____________

Signature of Purchaser                     Date

The new law is effective as of February 16, 2018, and is implemented 90 days after that date. The statement must appear on the face of the deed, be signed by the purchaser/grantee, and acknowledged (notarized). Of course, the blank lines would need to have complete information about the name of the taxing district and for what purpose the district is created.


Orange County Property Fraud Alerts

Phil Diamond, the Orange County Comptroller (the guy who oversees recordings of deeds, mortgages, and any other Official Records related to real estate and identity), announced today that his office now provides automatic alerts to subscribers who sign up for them.

Using the office's online system, subscribers can sign up to be alerted whenever a document is recorded in the Official Records with a name that matches the subscriber's. The service is free and recommended for everyone who is concerned about identity or property theft.

Users can subscribe for free here: