Why America Is Fixated On Knowing What Real Estate You Own
Gossip sites and governments alike are keen to unveil the true identities of wealthy real estate owners.
In this security-conscious age, discussing wealth is a sensitive subject. Real estate tends to be where many people park their cash. Whether it’s a drug dealer, celebrity, politician or international investor, most people don’t want other people knowing how many properties they own or where they’re located. However, unearthing the true owners of a property has become the business of both governments and celebrity gossip websites alike. Hiding an owner’s identity is becoming more and more difficult.
In celebrity circles, telephoto lenses, gossip in broker’s office, or a pool guy with a roving eye and a smartphone can often have a Hollywood actor’s interest in a property up on TMZ before they’ve even left the premises. More recently, confidentiality agreements or disguises have been used, the Wall Street Journal reports. With a major commission on the line, brokers are doing their utmost to keep their clients identities secret.
“Sometimes my client will wear a hat and sunglasses,” Josh Altman, celebrity LA broker with Douglas Elliman told the paper. “It’s become this cat-and-mouse game of doing everything that you can to try to hide [celebrity sales],” Mr. Altman said.
In 2015, The New York Times story revealed that real estate professionals often do not know much about buyers—or how they made their money back home. This is especially true with those mega-expensive condo units in buildings like Time Warner Center. Since then, the Treasury department announced rules that will require title companies to disclose the true buyers of all-cash purchases of residences in Miami and Manhattan priced $3 million and higher.
For years, buyers have used real estate to turn dirty money clean, using a complex warren of LLC’s, shell companies and other legal tools to obfuscate the true identity of owners of some of America’s most luxurious properties. With the Chinese government keen on curbing the cash leaving the country and the top end of the luxury real estate market slowing down, the real estate industry has been privately concerned that the intense investigation over an owner’s identity may have severe ramifications.
“Additional regulation is the last thing that we need to hurt potential business that really creates jobs for American workers,” Gary Barnett, president of Extell told Curbed. “This is another layer of difficulty that is going to potentially hurt further development.”
With a new real estate-savvy President taking office, it remains to be seen if the government’s current tighter policies regarding owner identification will remain in place—or be relaxed along with other real estate regulation such as the Dodd-Frank laws. Donald Trump prides himself as a deal maker and real estate is his currency. Rather than making America great again, it may once again become the country where the rest of the world feels comfortable parking its cash in bricks and mortar.
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