LLC Disclosure Rules will have Little Impact on Market
L.A. real estate professionals say the Treasury Department’s latest attempt to sniff out dirty money in real estate deals has missed the mark.
The majority of agents, mortgage brokers and title insurers surveyed by The Real Deal said they expect new regulations governing the use of LLCs will do little to curb money laundering, since there are wide loopholes. Instead, the inability to hide the identity of all-cash buyers through such entities will put additional pressure on title insurers and escrow companies, minimally slow down deal flow, and put the privacy and personal information of high-net-worth individuals in jeopardy, they said.
“In the past, I don’t think brokers have questioned it very much,” said Greg Harris of brokerage Compass in Beverly Hills. “We had a Chinese buyer once who disappeared in the middle of the Escrow and then miraculously came back from China with the rest of the money. It’s hard to know how many people are buying a property sometimes. It looks like one buyer but they could be bringing money together from family and friends.”