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States try to ferret out unnamed landlords

Tim Henderson, Stateline.org on

Published in Home and Consumer News

NEWBURGH, N.Y. -- This small Hudson Valley city features sweeping river and mountain views, charming rowhouses and Victorian homes that are drawing young professionals looking for a break from high housing costs downriver.

But the sight of abandoned or dilapidated houses next to renovated ones is a reminder that the city's revival still faces obstacles -- including landlords who can't be identified when it's time to make repairs.

Those landlords hide behind limited liability companies, or LLCs, which can be used to shield investors' other assets. When a property's owner is an LLC, the landlord can't be sued and their name may not even appear on deeds.

"When an LLC is involved there isn't a lot of good information about who the owner is and how the building can get repaired," said William Horton, an assistant fire chief in Newburgh who supervises the city's four building inspectors.

It's a nationwide problem that New York has addressed with a new law requiring LLCs to disclose all members and investors when buying or selling property.

Some other states also are moving to require more disclosure of LLC owners. Arizona's 2018 law requires a public record of every owner and member of an LLC, and Washington state has long required owners to disclose names and addresses.

 

In Connecticut, the city of New Haven is lobbying for something similar, as difficulty mounts with anonymous landlords.

Many cities, including Newburgh, have landlord registries requiring a point of contact for landlords, though many don't comply there, Horton said. The American Apartment Owners Association, representing landlords, has called some of the registries "intrusive."

The National Association of Secretaries of State, representing state officials who register LLCs and other corporate entities, has resisted efforts to standardize registration requirements that disclose more information than some states want to collect.

"States will be left to deal with a host of unworkable regulatory and compliance burdens" if they're required to collect more information about LLCs and corporations, the association said in a position paper supplied to Stateline.

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