Title Insurance Companies Have Been Mandated by an Amendment to a New York State Law, to Determine the Actual LLC Owners in ANY Residential Real Estate Transaction For Both the Buyer and the Seller, Regardless of Price or Locality!
Residential real estate: One to Four Family Dwelling
Summary (Courtesy of NYSLTA):
New Law Requires
Full Disclosure of LLC Members
On Friday, September 13, 2019, Governor Cuomo signed a bill that went into effect immediately, A7190/S1730 amends §1409 of the Tax Law and §11-2105 of the Administrative Code of the City of New York.
The law requires that when a grantor or grantee residential property is an LLC, all members be identified.
If a member of the LLC is another LLC or other business entity, the “members, managers or authorized persons” of said LLC or entity must be listed. This must continue until ultimate ownership by a natural person is achieved.
New York State Assembly Bill Summary
|SAME AS||SAME AS S01730|
|COSPNSR||Colton, Wright, Davila, Cook|
|Amd §1409, Tax L; amd §11-2105, NYC Ad Cd|
|Requires the real property transfer tax return relating to residential property sold or purchased by a limited liability company to include information on the ownership of such company.|
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7190 SPONSOR: Zebrowski TITLE OF BILL: An act to amend the tax law and the administrative code of the city of New York, in relation to real property transfer tax returns of limited liability companies PURPOSE OR GENERAL IDEA OF BILL: This bill requires limited liability companies to disclose the individ- ual members of the company when it files a joint tax return for any sale of real residential property that it is named the grantor or grantee in. This only applies to residential property containing one-to four-family dwelling units and requires that the joint tax return be accompanied with a list identifying all the members, managers, and any other author- ized persons of the company. This practice has been successfully imple- mented in New York City as of 2015. This bill seeks to codify the prac- tice in New York City and apply it on a statewide level. SUMMARY OF PROVISIONS: Section 1 of the bill adds a new subdivision (h) of Section 11-2105 of the administrative code of the city of Now York to require any limited liability company who is the grantor or grantee of a deed for residen- tial real property containing one- to four-family dwelling units to accompany the filing of any joint tax return a list identifying all the members, managers, and any other authorized persons. Sect on 2 of the bill incorporates the same provisions into section 1409 of the tax law into paragraph (a) for statewide application. Section 3 of the bill establishes that this act will take effect imme- diately. DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION (1F APPLICABLE): JUSTIFICATION: The issue of transparency that this bill addresses is important because when real estate transactions take place involving an LLC, those behind the companies are often unable to be identified. This bill seeks to address the anonymity and related concerns by requiring limited liabil- ity companies that engage in residential property sales to disclose their members when filing a joint property tax return. This practice has been successfully implemented in New York City as of 2015. This bill seeks to codify the practice in the city and apply it on a statewide level. PRIOR LEGISLATIVE HISTORY: Skoufis: 06/15/16 passed assembly. Carlucci: 6/15/16 referred to Rules Skoufis: 01/03/18 ordered to third reading Carlucci: 1/03/18 referred to Investigations and Government Operations FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None. EFFECTIVE DATE: The bill takes effect immediately. Text of the full Bill can be found here.Google+