Multi-Member LLC Disclosure Requirements in Transfer of Real Estate
September 24, 2019
By: Jennifer M. Boll
On September 16, 2019, Governor Cuomo signed a new limited liability company disclosure bill requiring greater transparency in real estate dealings. Previously, only single-member LLCs were required to disclose the name of the sole member on Form TP-584 (“Combined Real Estate Transfer Tax Return, Credit Line Mortgage Certificate, and Certificate of Exemption from the Payment of Estimated Personal Income Tax”).
The new legislation now mandates that multi-member LLCs owning one-to-four family dwelling units will have to provide more information to the public during the process of transferring real estate. Specifically, the legislation requires disclosure of the names and business addresses of all members, managers, and any other authorized persons of such limited liability company. An authorized person is defined under New York Limited Liability Company Law § 102 as a person, whether or not a member, who is authorized by the operating agreement, or otherwise, to act on behalf of a limited liability company or foreign limited liability company. Disclosure of the business addresses of all shareholders, directors, officers, members, managers and partners of any limited liability company or other business entity that are involved with such limited liability company may also be required.
Further, the legislation indicates that when filing the Form TP-584 during the process of buying or selling real estate, multi-member LLCs will need to identify all the authorized persons of the company. Currently, it is not yet determined whether there will be yet another update to the TP-584 form, or if a separate schedule will be added to ensure compliance with this new legislation.
The legislative changes are effective as of September 13, 2019.
If you have any questions about this Information Memo, please contact Jennifer M. Boll, any of the attorneys in our Business and Transactions Practice, or the attorney in the firm with whom you are regularly in contact.
1 2019 Bill Text NY S.B. 1730, available at: https://legislation.nysenate.gov/pdf/bills/2019/S1730.
3 2019 Bill Text NY S.B. 1730.