The real estate business is a multi-faceted industry that is heavily regulated by local, state and federal entities. These agencies have authority over land use, housing, taxes and zoning laws. Having an understanding of the laws governing this industry can help you to be a more successful real estate professional.
The federal government has some influence over the day-to-day regulation of the real estate business, such as fair housing laws and lending practices, but overall this industry is mostly regulated at the state level. Individual municipalities also play a role in setting specific zoning and land-use laws, which build upon the state’s framework to manage real estate development within their jurisdictions. The same can be said for insurance, which is largely regulated at the state level and coordinated through the National Association of Insurance Commissioners. Also read https://www.pandaprohomebuyers.com/selling-a-house-with-mold-maryland/
Many real estate professionals are required by the Bank Secrecy Act (BSA) to maintain anti-money laundering (AML) programs. However, FinCEN has long exempted persons involved in residential real estate closings and settlements from comprehensive BSA regulation and instead has focused on a series of time-limited geographic targeting orders (GTOs) directed to this sector.
In its 2021 Advanced Notice of Proposed Rulemaking, FinCEN is proposing to impose reporting and recordkeeping requirements on certain persons involved in residential real estate closings and settlemennts. The proposed rule would use a “cascading” approach to determine which persons are deemed to be reporting persons, which is designed to minimize burdens on those involved in the closings and settlements while still ensuring that the appropriate information is reported. Persons in the cascade would also have the ability to designate amongst themselves who will be responsible for submitting the report.
These proposed rules are intended to address the significant illicit finance risks posed by the abuse of U.S. residential real estate markets, including the use of legal entities and trusts to facilitate money laundering and other illicit activities. The proposals include a streamlined SAR reporting requirement and a new form, the Real Estate Report.
The proposed rule includes a definition of “regulant” that covers all individuals and entities licensed by the Board as real estate brokers or salespersons, including those operating as business entities. The rule also includes a provision that prohibits business entities from acting as salespersons unless all owners and officers of the business hold a valid license issued by the Board. In addition, a licensee must complete a minimum of 24 hours of continuing education courses offered by the Board or an approved provider. If a licensee fails to complete the courses, the license may be suspended or revoked by the Board. In addition, the rule requires that the Board establish guidelines for educational curricula in residential and commercial real estate. The guidelines must be reviewed and updated on an annual basis. The guidelines must also be distributed to the Board’s licensing and compliance staff and to other interested parties. The Board may also require a regulant to provide the Board with educational curriculum materials it deems necessary or desirable to implement the guidelines.
