LIEB BLOG

Legal Analysts

Wednesday, March 08, 2017

FinCEN Renews Order Requiring Full Disclosure of Persons Behind All Cash Purchases of High-End Real-Estate

The Financial Crimes Enforcement Network (FinCEN) of the US Department of the Treasury renewed a Geographic Targeting Order (GTO), on February 23, 2017, requiring “U.S. title insurance companies to identify the natural persons behind shell companies used to pay ‘all cash’ for high-end real estate in six major metropolitan areas.” The counties covered in this renewal are: all New York City Burroughs, Miami-Dade County, Broward County (FL), Palm Beach County (FL), Los Angeles County, San Francisco County, San Mateo County (CA), Santa Clara County (CA), San Diego County, and Bexar County (TX).

Each county will have a different monetary threshold for transactions covered by this GTO to become applicable. In New York, covered transactions shall be all cash payments for real property at or above a total purchase price of $1,500,000 in Brooklyn, Queens, Bronx, Queens, and Staten Island. In Manhattan, covered transactions are set at or above a purchase price of $3,000,000.

A title insurance company involved in a covered transaction will be required to file a FinCEN Form 8300 detailing, inter alia, the identities of any persons representing the purchaser and any “Beneficial Owners” (an individual who owns 25% or more in equity of the purchaser) “within 30 days of the closing.” For New York, this GTO will continue to prevent anonymous high-end purchasers in the five boroughs.

Tuesday, March 07, 2017

Tracking Proposed Legislation to Extend the Mortgage Debt Forgiveness Relief Act into 2017

The remnants of the Mortgage Debt Forgiveness Relief Act only apply in 2017 to debts that were subject to a written agreement which was entered into in 2016. So, as of today, all new agreements that forgive debt (i.e., short sale, deed-in-lieu or mortgage modification with principal reduction) will expose the debtor to income tax, which tax will be based upon their corresponding debt savings.

H.R.110, the Mortgage Debt Tax Forgiveness Act of 2017, seeks to "amend[] the Internal Revenue Code to make permanent the exclusion from gross income of income attributable to the discharge of qualified principal residence indebtedness."

S.122, the Mortgage Debt Tax Relief Act, seeks to "amend[] the Internal Revenue Code to extend through 2018 the exclusion from gross income of income attributable to the discharge of indebtedness on a principal residence."

While H.R.110 is preferable to forever eliminate a tax on unfortunate homeowners incident to having their debt forgiven, please support either bill by contacting your local congressman and having your voice heard.

Monday, March 06, 2017

Top 10 Real Estate Laws of 2016

Now that 2017 is here it is important to be aware of the changes in the law for our industry. This is not a list about the best events from 2016, but, instead, a list that highlights the new legal landscape that you face as real estate attorneys in 2017. Being familiar with these laws, regulations and opinions may help you to better address your client’s goals and to make you money while helping you to avoid malpractice.

Topics Include:

  • Defaults waived in foreclosures
  • Real Estate broker continuing education changes
  • Premises liability for neighboring properties to the situs of trip and fall expanded
  • Storm in Progress Doctrine includes wintery mix
  • Vested right to develop requires reasonable reliance
  • Vested right to develop requires legally issued permit
  • Justiciability of positive declaration pursuant to SEQRA
  • Condominium lien priority
  • End of anonymous LLC members in NYC
  • Citizenship for real estate investment trusts