Gov. Hochul Signs Watered-Down LLC Transparency Act
Condo owners on Billionaires' Row are likely pleased by the compromise LLC Transparency Act.
Jan. 2, 2024 — Bill to reveal secretive owners of condos passes, with a major condition.
In early December, we asked: Will she or won't she? As in, will Gov. Kathy Hochul sign the LLC Transparency Act into law by the end of 2023?
The answer is now out: She did. Sort of.
On Dec. 29, the last business day of 2023, Hochul signed 42 bills and vetoed another 43, Gothamist reports. Among those she signed was the LLC Transparency Act, which will shed more light on real estate ownership by requiring limited liability companies and other corporate entities to reveal the names of their "beneficial owners." But the compromise version of the bill signed by Hochul will not make the identities of those beneficial owners public, as the original bill proposed. Instead, their identities will be available only to law-enforcement officials investigating possible illegal activity.
“The bill as drafted was overly broad, and required changes to ensure it serves the core purpose of exposing unlawful activity while balancing personal privacy,” Hochul wrote in a memo.
As the bill worked its way through the Legislature to the governor's desk, it roused passionate emotions, pro and con, among housing advocates, labor unions, lawyers, real estate brokers, district attorneys, developers, even condo boards, many of which have units in their buildings owned by anonymous limited liability companies.
About 12% of properties in New York City — and 37% in Manhattan — are owned by LLCs, according to an estimate from Reinvent Albany, a good-government organization that supported the bill. A considerable number of those LLC-condos are on Billionaires' Row and other pricey neighborhoods
“Sunlight is the best disinfectant,” says state Sen. Brad Hoylman-Sigal, a Manhattan Democrat who sponsored the bill. “And we've seen examples of money laundering, wage theft, abuses by bad landlords and terrorism that demand full transparency of these entities."
As it played out, full transparency did not come to pass. The human faces behind LLC's will be known — but only to the government, not to the general public.