New LLC Transparency Law Impacts Residential Property Owners

New LLC Transparency Law Impacts Residential Property Owners

Rockland Daily Staff

The Town of Clarkstown has unanimously passed a new local law requiring the disclosure of beneficial owners of residential real estate. 

The Town's reasoning for this new law is that anonymous ownership "is correlated with numerous code violations, high rents, and evictions. They hamper routine code enforcement, burdening the Town government," as written in the Town Board's September 12 agenda packet  which can be found here. 

Clarkstown claims this new law will protect "the character and stability of residential areas" and preserve the value of the land and buildings throughout the town. 

Residential real estate beneficial owners will be required to file their full legal name, residential street address, phone number, date of birth, and driver's license/passport number within ninety days of the law's effective date. The local law will take effect immediately upon filing with the Secretary of State of the State of New York. 

To be considered a 'beneficial owner," one must either exercise "substantial control over the entity" or own 5% or more of the entity. The public will have access to owner filings by submitting a Freedom of Information Law form. 

A similar law has been signed by the Senate and Assembly in New York State but is waiting on Governor Hochul's signature. The State law is less strict than the one passed in Clarkstown, defining a beneficial owner as one who owns a minimum of 25% of the LLC. 

Clarkstown has laid out the penalties for offenses to their new law—a fine not less than $3,500 and not exceeding $5,000. Each week of the violation is deemed a separate offense, and costs such as attorney's fees can be added. This contrasts with the State version, which has a $250 fine if an entity has not registered after two warnings.

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