National Security Risk in Real Estate: Things You Need to Know

The United States has an agency called “The Committee on Foreign Investment in the United States,” or CFIUS. It is CFIUS’s job to make sure that money moving into the United States from overseas is not being used for purposes that could compromise national security. Recently, there has been a proposed rule that will expand CFIUS’s purview and allow the agency to review real estate transactions within a certain scope, not just on an ad hoc basis. Let us take a look at what this might mean for your future real estate deals.

What the CFIUS Proposed Rule Means for Real Estate

Until now, CFIUS has not had the authority to weigh in on certain real estate transactions within the United States. However, with large amounts of money coming into the country to make property purchases, CFIUS wants to make sure that none of these purchases create problems of national security.

Real estate agents are not required to inform CFIUS when taking part in a deal with a foreign investor, though they can decide to do so voluntarily. CFIUS can also not compel an agent to make such a notification. However, if no notification is made, CFIUS can enact a “forced unwinding of the transaction” in the future.

What Types of Real Estate Will CFIUS Care About?

Under the Proposed Rule, CFIUS will care about deals near airports, maritime ports, close proximity military installations, extended range military installations, and coastal military installations. The agency is generally not going to look at transactions that involve a single housing unit or real estate in urbanized areas. CFIUS does have the authority to step beyond these limits if the situation calls for it, but such cases will be the exception, not the rule.

Propy Resolves Issues Quickly, Should They Arise

Propy specializes in keeping data and communications transparent and secure in its blockchain-based platform. Should a CFIUS request arise during your next real estate transaction, you can quickly supply all of the requested information, as it will already be organized within Propy.