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National Investors Title Insurance Company ("NITIC") has been issued a Geographical Targeting Order ("Order") by the Director of the Financial Crimes Enforcement Network ("FinCen"), U.S. Department of the Treasury, requiring NITIC, subsidiaries and agents ("Covered Business") to collect and report information about the persons involved in certain residential real estate transactions in the following counties/boroughs: Bexar County, Texas, Miami-Dade, Broward, Palm Beach County, Florida, Boroughs of Brooklyn, Queens, Bronx and Staten Island, and Manhattan New York. This reporting requirement applies to all "Covered Transactions" as defined in this memorandum and attached ancillary documents.
This Order applies to any Covered Transaction in which a Covered Business is involved ("involved" is read to cover the issuance of a title insurance policy, conducting a settlement or performing any service). Please note that under the Order NITIC, subsidiaries and agents may be held liable, without limitation, for civil or criminal penalties for violating any of the terms of the Order.
This Order goes into effect August 28th, 2016 and continues through February 23rd 2017 (subject to extension by FinCEN). Any transaction closed, or policy issued with an effective date as of August 28th 2016 is subject to the Order and its requirements.
A copy of the Order is attached for your reference. Should you have any questions regarding this Order or the attached forms, please immediately contact Mike Aiken. 1-800-326-4842
What is a Covered Transaction?
The Order defines a Covered Transaction as one in which:
1. A Legal Entity (a corporation, limited liability company, partnership or other similar business entity, whether formed under the laws of a state or of the United States or foreign jurisdiction)
2. Purchases residential real property,
3. For a total purchase price at or above:
TX- Bexar County - $500,000
4. Such purchase is made without a bank loan or similar form of external financing through an institutional lender; and
5. Such purchase is made, at least in part using currency, a cashier's check, certified check, traveler's check, a personal check, business check, or money order in any form.
Note that all five prongs must be satisfied for a transaction to qualify as a Covered Transaction and require reporting. Please see the attached ALTA Covered Transaction Determination form for a checklist with these five prongs.
Underwriting Requirement
As of August 28th 2016, and until further notice is provided from NITIC, all residential real estate transactions that meet the price threshold in the selected counties/boroughs the title report or commitment must contain the following requirement:
This transaction may be subject to a FinCEN Geographic Targeting Order affecting residential sale transactions. The Company must be provided with certain information prior to closing, sufficient to determine whether IRS/FinCEN Form 8300 must be completed and filed. In the event that incomplete or insufficient information is provided, the Company will not close or insure this transaction.
Reporting Requirement
If all five prongs above are satisfied, NITIC is required to report certain information to the government on IRS/FinCEN Form 8300. Form 8300 requires the collection of the following information (i) identity of the purchaser, (ii) identity of the Beneficial Owners, (iii) identity of the individual primarily responsible for representing the Purchaser, and (iv) a breakdown of the funds received.
Beneficial Owner
A Beneficial Owner is defined in the Order as each individual who, directly or indirectly owns 25% or more of the equity interest of the Purchaser. Note that if the Purchaser is a Limited Liability Company, the Covered Business will need to provide the names, addresses and tax payer ID numbers for all members (individuals or entities). See Beneficial Ownership Identification attachment for examples.
Record Retention
Pursuant to the Order, all documents related to the collection of reportable information must be retained for 5 years, from the date of expiration of the order, subject to extension by FinCEN.
Reporting Requirements and Information Collection
NITIC will handle the reporting of all Covered Transactions for agents and subsidiaries. See the attached ALTA GTO Information Collection Form for a detailed breakdown of all necessary information that must be collected. A copy of the completed ALTA Covered Transaction Determination Form, the ALTA GTO Information Collection Form and any government issued identification required to be obtained must be submitted to the Company at
[email protected]
no later than 15 calendar days after the closing of the transaction (issuing a policy, facilitating settlement, providing a service).
The ALTA GTO Information Collection Form can be sent to a party to the transaction for completion. This may include the purchaser, real estate agent, or attorney for the purchaser. Please note, that if the ALTA GTO Information Collection Form is not complete, or signed by the party completing the ALTA GTO Information Collection Form, it will be returned to be completed.
Click Here - Covered Transaction Determination Form
Click Here - Ownership Identification Sheet
Click Here - Information Collection Form
Click Here - Geographic Targeting Order
Click Here - Flow Chart
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