In the News: Condo Owners Can Remain Anonymous After All
A few weeks ago the Long Island real estate market went into an uproar over a new law which required LLCs to disclose the names and addresses of everyone involved in owning a property, including condos. A few days ago, the State Tax Department reversed its stance, excluding condos from the reporting requirement.
Instead, the law refers only to residential buildings with one to four units. Condos may continue to use LLCs to protect their anonymity.
The law was put into place due to concerns over individuals who used anonymity to launder money through New York’s real estate market. It was also meant to combat blight. A 2018 New York Times article revealed in many states, LLC-held companies are ill-kept and abandoned. Sometimes the LLC goes out of business without selling the property, leaving a property nobody can claim or sell.
Lawmakers were also concerned about landowners who use LLCs to dodge tenants who want repairs, or consequences for unlawful evictions. Registered agents are always named on LLC documents, but they only have to accept lawsuit documents and government notifications. This means the people who own the LLC often remain untouchable, even as they continue to profit from the property.
In trying to correct these problems, the new regulation created hardships for two types of people: group investors, and wealthy individuals who wish to protect their anonymity. Both of these interests have legitimate reasons for wanting to preserve their privacy.
Some aren’t even doing it for privacy reasons.
Putting property into an LLC also serves as an asset protection strategy for many investors. The LLC structure also works to protect buyers from incurring personal liability if someone gets injured on the property.
The LLC structure also allows family members to invest together, as well as groups of people who would find the barrier to entry too high on their own.
If you want to preserve your own anonymity it is vital to structure your LLC correctly, and to handle your real estate purchases in a way that preserves the anonymity you’ve worked so hard to accomplish. If you’re trying to do it for asset protection purposes the steps you need to take will become even more complex.
If you need help preserving your anonymity while purchasing a new condo here on Long Island, contact the Law Office of Sami Perez today.
See also:
5 Ways to Minimize Liability at Your Long Island Rental Property