FOR IMMEDIATE RELEASE
Aug. 29, 2024
CONTACT
Carter Dougherty
carter@ourfinancialsecurity.org
(202) 251-6700
New Treasury Rules Pull Back the Curtain on Corporate Landlords and Their Financial Backers That Can No Longer Hide Behind LLCs
WASHINGTON — The Treasury Department released two new rules requiring the disclosure of real estate ownership transparency that will make it easier to identify corporate real estate backers and crack down on money laundering in the real estate sector. This announcement comes the week after the Department of Justice launched a lawsuit against RealPage for facilitating rent price fixing by corporate landlords, and together represent major back-to-back tenant victories against corporate landlords and their privately-funded financial backers. Earlier this year, AFREF joined with the FACT Coalition and 35 organizations committed to affordable housing to support a proposed version of these rules.
On Thursday, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) released a new rule requiring the disclosure of individuals directly involved in all-cash and non-sale of single-family real estate purchases. This new requirement, also known as beneficial owner disclosure, is intended to crack down on the widespread practice of money laundering in real estate transactions and private funds.
“Financial fraudsters and abusive landlords have too long hidden behind anonymous LLCs and all-cash or non-financed purchases to avoid accountability for their crimes, all while driving up housing prices. During this unprecedented housing affordability crisis, aspiring homebuyers should not be forced to compete with anonymous deep-pocketed bidders and tenants should not be forced to rent from them,” said Caroline Nagy, Senior Policy Counsel for Housing, Corporate Power, and Climate Justice at Americans for Financial Reform Education Fund.
The second rule imposes new anti-money laundering requirements on investor advisors in private equity and hedge funds that are often involved in investing in or purchasing single-family homes outright. These firms are now required to adopt standard risk-based anti-money laundering and counter-terror financing procedures, and they must file suspicious activity reports that would place advisors on the hook for illicit financing.
“These new requirements provide an important tool to crack down on fraud in the single-family housing market,” said Nagy, “and FinCEN should quickly move to adopt similar requirements for commercial real estate, so multifamily renters can benefit from them as well.”
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