Occasionally, private investigators are asked to find the true identity of the owner of property that is owned by a Limited Liability Company (LLC). Most of the time, the property is a luxury property, and the majority of these transactions are cash transactions. There could be many reasons why a client may hire a private investigator to find out the true owner of property, one being if the property is subject to attachment and liquidation by creditors. Interestingly, this may actually be one of the more challenging assignments for a private investigator as the main reason why an LLC is used in a real estate transaction in the first place is to hide the identity of the true owner(s). There are many reasons why individuals and/or corporations utilize business entities such as Limited Liability Companies including use as tax shelters and for the protection of personal assets. Beyond that, there are other more insidious reasons for the use of LLCs including attempts to hide illegal sources of money and to avoid international sanctions.
The whole concept of using Limited Liability Companies to purchase property is changing, however, and the whole real estate industry is in a state of flux regarding their usage. Attorneys, brokers, title companies, managing agents, and co-op boards will now be forced to disclose information that was previously private. According to the New York Times in an article titled “U.S. Will Track Secret Buyers of Luxury Real Estate” dated January 13, 2016, the federal government has required that managing agents, co-op boards, brokers, and other relevant parties disclose the names of the parties involved in an all cash purchase. According to the article, the government’s project will be tested in two of the nations major destination for global wealth: Manhattan and Miami-Dade County.
If a wealthy owner was able to use cash to purchase property in some of the most lavish real estate markets with the intent of establishing a tax deferral—only paying taxes on the property later when either the LLC or property is sold—why would the government decide to intrude on a market that has for the most part been free of any government regulations so far? The government’s intent for requiring the identification of high-end cash buyers is to stem the flow of dirty money. According to a treasury department official, Jennifer Shasky Calvery, high end or multi-million dollar homes were being used as safe deposit boxes for “ill-gotten gains,” from industries including illegal arms and munitions, human trafficking, and money laundering. There is also the possibility that the properties may become a safe haven for terrorist activity.
Requiring real estate companies to disclose the names behind all cash transactions and identifying and tracking secret buyers of high end properties will make the job of a private investigator a lot easier when trying to identify the names of a property owner. Over the years, Integrated Services has handled many different types of real estate investigations, including as part of landlord/tenant disputes and are capable of servicing the needs of individuals, brokers, and real estate law firms among others.