ESSOPUS, N.Y. – A bill has been favored by the state Legislature that requires limited liability corporations to make public disclosure of beneficial owners.
Assemblywoman Sarahana Shrestha, D-Esopus, who is a co-sponsor of the LLC Transparency Act, said in a statement that the bill now awaits the signature of Gov. Kathy Hochul in order for it to become law.
Both Shrestha and state Sen. Michelle Hinchey, D-Saugerties, voted in favor of the bill.
Shrestha represents the 103rd Assembly District while Hinchey represents the 46th Senate District.
Shrestha’s office has said that, unlike some existing laws that were previously passed and have been unsuccessful at holding LLCs accountable, the new bill requires “beneficial owners” to be published in a public-searchable database, and it also creates a waiver for those who are justified in needing privacy, such as whistleblowers and participants of the state’s Address Confidentiality Program.
“The anonymity of an LLC’s beneficial owners creates a dark hole for corruption, but it also has an increasing implication for a housing market where LLC landlords are buying up properties in droves and driving up prices,” Shrestha said in a statement. “Earlier this year, state legislators were required to complete financial disclosure forms, and we learned that the husband of one my colleagues is a partial owner in 200 apartments in New York City,” Shresta said , referring to Westchester Assemblywoman Amy Poulin. “This is illustrative of how those who have the means are using housing as investments to maximize profits, and those who don’t are left to the whims of profiteers.”
Shrestha said that the public is left in the dark.
“We have very little idea as to who is benefiting from rent increases while hiding behind LLCs. In order to enforce accountability in the housing market, we need transparency that informs us who we’re trying to hold accountable,” Shrestha said.
Her office said that the proliferation of LLC owners has also undermined the sense of community.
Shrestha said her office has received complaints.
“A constituent reached out to us for help because she rents in a building that was sold to a new LLC owner, and she received a notice that said her rent checks were not accepted because she was required to pay electronically,” the assemblywoman’s office said in a statement. “This type of requirement is illegal, but she had no way of verifying with the landlord if this was a legitimate notice, because the only way she could get in touch was to write a letter addressed to a P. O. Box. This story gives a glimpse into how LLC landlords dehumanize tenants.”
Shrestha said she has personally been affected by hidden ownership provided by LLCs.
“My campaign rented a space in Kingston during the primary election, and I myself dealt with an unresponsive property manager representing an LLC,” Shrestha said. “I still have no idea who the real owners are.”
