News & Insights

Home » News & Insights » New York’s change to LLC law could transform NYC real estate transactions

New York’s change to LLC law could transform NYC real estate transactions

Legal Developments, Other, Real Estate Developments, Real Estate Legality

The real estate world has been trying to digest the implications of a new law quietly passed in September that would require all buyers of property to have their names publicly available under the state’s Freedom of Information Law. As most will be aware, many individuals that purchase real estate in New York City do so quasi-anonymously by using a limited liability company (LLC). These include celebrities, other high-net worth individuals who value their privacy, and oftentimes wealthy foreign buyers. The provision was ostensibly included to better ensure compliance with building codes—a way for neighbors or landlords to reach anonymous owners. However, the nature of this legal change suggests it could have far-reaching consequences for the buying strategies at the high end of the city’s real estate market. [1]

More than 30 percent of condos sold since 2008 were purchased using LLCs, and the Wall Street Journal’s analysis indicates that 61000 one-to-four family homes were purchased using LLCs—indicating the large scale of this practice in the city. Somewhat ironically, the bill limiting the practice was pioneered by Hudson Valley lawmakers seeking to combat large-scale anonymous land purchases further upstate, but once passed the state’s regulatory agencies have chosen to interpret the language of the legislation as broadly as possible. The real estate industry has already mobilized against the law, arguing both that the law will scare of buyers who value their anonymity as well as be impractical, as Real Estate Investment Trusts (REITs) may have thousands of shareholders who cannot reasonably be named as co-owners of every condominium a REIT may own. This major legal development remains very much a live issue, and much like this summer’s rent law, marks a major shift for the city’s real estate market. [2]

[1] Plitt, A. (October 2019) New law could unmask secret buyers of New York City real estate from Curbed NY Accessed October 16 2019

[2] O’Regan, S. (October 2019) Sweeping LLC law surprised even legislators from The Real Deal Accessed October 16 2019

Recent Posts

Impact of Shorter COVID-19 Quarantine on Workplaces

On Monday, the CDC announced changes to its recommended isolation and quarantine time from 10 days to 5 days for asymptomatic people with COVID-19. They recommend that people leaving isolation after 5 days continue to wear a mask for the following 5 days. The CDC also...

Restaurants Sue Over Vaccine Mandate

Restaurant operators sued Mayor Bill de Blasio and New York City over Key to NYC, the new indoor vaccine mandate program, on August 17-the same day the mandate went into effect. A group of restaurants in Staten Island, through the Independent Restaurant Owners...

Financial Regulators’ New Target: Social Media Influencers and SPACs

The Financial Industry Regulatory Authority (“FINRA”) will conduct three new regulatory sweeps in an effort to combat various activities causing extreme fluctuations in the financial markets. FINRA has chosen to target special purpose acquisition companies (“SPACs”),...

Does WARN Apply to Virus Closures?

Enterprise, in Benson et al. v. Enterprise Leasing Co. of Florida LLC et al., has tried to argue that the Worker Adjustment and Retraining Notification Act (“WARN”), through its natural disaster exception, does not apply to closures caused by COVID-19. Two Florida...