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LLC Disclosure Law of 2019 - A Clarification

Posted By Government Regulations Committee, Thursday, October 31, 2019
Updated: Thursday, October 31, 2019

IMPORTANT NOTE - The content of this post was emailed to NYSLTA Members on October 30, 2019.

That email included an addendum to the TP-584, which was inaccurate.  The file attached to this page is a corrected version and may be used anywhere in NY state, including NY City.

 


The purpose of this memo is to clarify the impact of the changes to Section 1409(a) of the New York Tax Law, which became effective September 13, 2019.

 

As you are aware, the new legislation requires the real property transfer tax return (the TP 584 and the TP584-NYC) relating to residential property (containing one- to four-family dwelling units) sold or purchased by a “Limited Liability Company” (LLC) to disclose information on the ownership of such company.

 

The legislation requires that the TP584 and the TP584-NYC MUST be accompanied by documentation that identifies the names and addresses of all members, managers and other authorized persons of the LLC.

 

Further, if any member of the LLC is another LLC or other business entity, all shareholders, directors, officers, members, managers, partners and authorized persons of said LLC or business entity must be listed by name and address until “full disclosure of ultimate ownership by natural persons is achieved. 

 

We realize that in some cases (e.g. a publicly traded corporation) this requirement will be practically impossible to comply with; we have been unofficially advised that we should submit the addendum with a statement that the entity is a publicly traded corporation and that the Clerk’s should accept the deed for recordation.

 

Therefore,

  • If you are recording a deed; AND
  • it is for residential real property containing a one- to four- family dwelling unit, AND
  • a grantor or a grantee is an LLC

 

an addendum must be attached to the TP584 or the TP584-NYC identifying the names and addresses of all LLC members.

 

Although the State has not promulgated an “official” addendum to the TP forms, we attach a link to a form which has been accepted by the County Clerks.

 

Click the link below for a sample addendum which can be completed and submitted to fulfill the above requirements.

 

The Department of Taxation & Finance provides some guidance and examples here: https://www.tax.ny.gov/bus/transfer/rptidx.htm#conveyances

 

The NYSLTA has been actively engaged with the Dept of Taxation & Finance, the County Clerks, and the State, City and County Bar Associations regarding the foregoing.

 

Additionally, we have reached out to the sponsors of the legislation to provide input when an amendment is under consideration.

 

Further memos with guidance will be issued by NYSLTA, if and when the New York State Department of Taxation and Finance issues same.

 Attached Files:

Tags:  County Clerk  disclosure  Land Records  LLC  mortgage tax  NYS Dept Tax & Finance  transfer tax 

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