WHO REALLY OWNS THAT BUILDING? Orangetown Wants to Force LLC Owners to Disclose Identity

Town attorneys fear rule may be unprecedented and spark costly legal battles
 
BY ROBERT KNIGHT  
City Editor
 
LLC proprietors would remain forever anonymous if it weren’t for meddling Orangetowners
The true owner of properties registered in the name of a LLC is often a mystery

A controversial and potentially landmark item on the Orangetown Town Board’s agenda forTuesday, May 16 is expected to draw a large crowd and an extended debate.

 
A public hearing will be held at 8:15 p.m. on a proposed law that would require the owners of all types of corporations and businesses making an application for construction to the Building Department or land use boards, to identify the individual identities of owners, partners or principals. This would enable the town to better enforce building and safety codes, because in the case of LLCs that own buildings it can be quite difficult to identify the responsible parties.
 
It would also enable the town to better monitor for any conflicts of interest that might exist among property owners, land use board members or others involved in proposed developments in the town. The proposed law exempts small residential renovations or projects like sheds, fences, pools or decks. 
 
At previous discussions on the issue in Orangetown, lawyers have observed that this is probably the first municipality in New York State or elsewhere to attempt to force LLCs to identify their owners and may set a national precedent that could be challenged in lengthy court battles. 
 
Orangetown has hundreds, and possibly thousands, of invisible companies operating as LLCs, or Limited Liability Corporations. The LLCs own property and conduct business on those properties, but no one in town government knows exactly who the individual owners or partners in the firms are. If questions or problems arise, the town can only send mail to business addresses listed by the LLCs. If they fail to respond, the town is powerless to enforce local laws against them.
 
Discussion of the law was first heard two or three years ago in response to alleged “blockbusting” practices by Hasidic Jewish buyers attempting to purchase commercial and residential properties for cash and through LLC companies, supposedly to hide the owner’s true identities. Under the proposed new law, any property or business owned or operated by anything other than individually named owners would have to disclose the individual names, addresses and contact information for all partners in the firm. Under existing law, LLCs can own property and conduct business and do not have to identify anywhere who their real owners are. 
 
If the law is approved, all such owners would have to identify themselves as part of any application for building or construction with names, actual residential or business addresses and contact information such as telephone numbers, e-mail addresses or similar identifications. The proposed law, the first such legislation in Rockland County, is expected to draw a large crowd because of the contentious nature of the bill. 
 
It is strongly supported by town officials, such as the police and building departments, and by residents who fear an onslaught of unwanted development in Orangetown by essentially anonymous private corporations.
 
It is strongly opposed by many lawyers, whose bread and butter business often consists of creating LLC corporations for clients who wish to remain anonymous. It is also opposed by real estate interests and by residents with strong civil liberties sympathies who fear governmental intrusion and rules requiring them to identify themselves rather than being able to exist in obscurity.