Did You Know?

February 20, 2024



There is a new law.  This law became effective on January 1, 2024.  Anyone who owns an entity anywhere in the United States now has the obligation to report as to ownership under the Financial Crimes Enforcement Network (FinCEN).  With limited exceptions, the Department of Treasury Bureau now requires any company, opened at any time, whether in the future or in the past, to report.  For companies formed prior to 2024, the filing deadline is January 1, 2025.  For companies formed in 2024, the filing deadline is 90 days from filing.  For companies filed on or after January 1, 2025, the filing deadline is 30 days from filing. 

Any party who has a 25% beneficial ownership interest in any entity or has substantial control of any entity (including officers, managing members, those with sufficient voting rights) must report their names, addresses, dates of birth and their unique identification number which is obtained by supplying additional information to the government. 

The purpose of this law is to help the government control illicit activity, money laundering, financing of terrorism, tax fraud, human and drug trafficking, counterfeiting, piracy and securities fraud, financial fraud, malicious acts of foreign corruption, harming the security interest in the United States, etc.  For now, the information may only be made available by FinCEN to federal, state, local and tribal government agencies, federal law enforcement agencies, judges, prosecutors and central authorities, financial institutions using information for customer due diligence requirements, federal regulators, regulatory agencies, and the US Department of Treasury.  Given the amount of hacking and leaking going on, and the possibility that the laws may change again, I am not sure whether I believe it will be limited to these agencies, but time will tell.  However, the failure to provide the information within the timelines provided may result in serious financial penalties and fines.  Further, any subsequent change in beneficial ownership or control of a company must also be reported to FinCEN.  Anybody creating an entity also has liability for reporting under the new act so many accountants and lawyers who formerly opened new companies may now decline to do so.


New York has historically always been a buyer beware state.  Buyers were well advised to do their own inspection of a house prior to purchasing it, usually with the assistance of an engineer.  As many of you may recall, in 2002 the law was changed to require that upon sale of a house, the Seller provide either a Property Condition Disclosure Statement (PCDS) or a $500.00 credit at closing.  The statement was in 48 parts and described in detail the Seller’s knowledge as to the condition of the house.  Most of my fellow attorneys in the Long Island and New York City areas routinely recommended their Sellers give the $500.00 credit rather than the PCDS to avoid post-closing liability. 

The law has now changed again.  Effective March 20, 2024, the $500.00 credit is no longer an option.  Sellers must provide the PCDS related to the condition of the property.  The new form is required to be delivered prior to signing of the Contract of Sale.  Further, the form has been modified to include information regarding flooding and flood zones.  Do you know what flood zone you are in?  Are you aware that flood zone categories have changed and your information may be inaccurate?  You now face potential liability if you give the wrong information.

Now, rather than relying on just the engineer’s inspection report, a Buyer will have remedies against a Seller should the answers provided by Seller turn out to be inaccurate.  This also includes Seller stating “unknown” when the Seller knew or should have known of a condition.  It is not clear whether this form can be waived by a Buyer or what damages a Seller may face in the event that the answers are inaccurate.  It is clear however that this new law will, if nothing else, likely create more litigation.  

Seller’s Brokers: Did you know you have an affirmative obligation to advise your Seller of the requirement to deliver the PCDS.  Buyer’s Brokers: you too have an obligation to inform your Buyer of the right to receive the PCDS.  If you fail to do so, there are repercussions for you and your customer.

Nothing contained in this article is intended to provide legal, tax or any other advice but are merely intended to raise awareness of issues.  You are should discuss these matters further with your personal legal and tax advisors. If you wish to further discuss these developments, you may also contact Robert Bichoupan at (516) 482-1186 or by email at [email protected].







Prior results do not guarantee a similar outcome. All information posted is general advice only, based upon the rules of NYS, and is not intended to be a substitute for personal legal advice. Although information provided here was accurate as of the date of posting, laws change frequently and rules in other jurisdictions may differ. Therefore, readers should not rely upon these postings but should consult an attorney to discuss their specific factual situation.

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