The New York State Senate has passed bill S119/A1506, which amends the rent registration statutes codified in Section 517 of the Rent Stabilization Law and Section 12-a of the Emergency Tenant Protection Act of 1974. It now heads to the Assembly and, if signed, to the Governor’s desk.
The bill provides that when an owner of a housing accommodation is a limited liability company and is registering an apartment with DHCR, the LLC is required to include in its submission to DHCR the following information:
- A list of all “beneficial owners” of the membership interests of the LLC; and
- The proportion of each direct or indirect member’s ownership interest in the LLC.
The bill defines “beneficial owner” very broadly. Specifically, it defines “beneficial owner” as “an individual who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, owns any equity interest of an entity, and/or has a level of control over the funds or assets of the entity that, as a practical matter, enables the individual, directly or indirectly, to control, manage or direct the entity and the use of its funds and assets or any part thereof”.
The Bill still must pass the Assembly and be signed by the Governor before it becomes law. If passed by the Assembly and signed by the Governor in its current form, it takes effect immediately.
The bill is bound to have immediate and long-reaching effect on the way the multifamily industry does business. We strongly encourage you to reach out to us to discuss how this legislation affects you and best practices moving forward. Please contact your trusted R&E attorney or Zachary J. Rothken, Member and Head of the firm’s Administrative Law Department, who authored this alert.