A 7296: Relates to the number of residential properties limited liability companies can own; requires beneficial owners of limited liability companies identify themselves when transferring or purchasing real property.

  
  STATE OF NEW YORK ________________________________________________________________________ 7296 2025-2026 Regular Sessions  IN ASSEMBLY March 25, 2025 ___________ Introduced by M. of A. TAPIA -- read once and referred to the Committee on Corporations, Authorities and Commissions AN ACT to amend the limited liability company law and the real property law, in relation to limiting the number of residential real properties beneficial owners of limited liability companies can own The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The limited liability company law is amended by adding a 2 new section 1101-a to read as follows: 3 § 1101-a. Limitations on beneficial ownership of residential proper- 4 ty-holding limited liability companies. 1. Definitions. For the purposes 5 of this section, the following terms shall have the following meanings: 6 (a) "Beneficial owner" shall have the same meaning as such term is 7 defined in 31 U.S.C. § 5336(a)(3). 8 (b) "Covered limited liability company" shall mean any limited liabil- 9 ity company that holds title to one or more parcels of residential real 10 property located within the state of New York. 11 2. Ownership limitation. No individual shall be a beneficial owner of 12 more than three covered limited liability companies that own residential 13 real property located within the state of New York. 14 3. Prohibited transactions. No covered limited liability company shall 15 acquire title to residential real property if such acquisition would 16 result in any beneficial owner being associated with more than three 17 covered limited liability companies. 18 4. Mandatory disclosure. (a) Upon the filing of articles of organiza- 19 tion for any covered limited liability company that intends to acquire 20 residential real property, the applicant shall disclose the name(s) and 21 identifying information of all beneficial owners to the department of 22 state. 23 (b) Any covered limited liability company transferring title to or 24 acquiring residential real property shall include a beneficial owner's EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD11236-01-5 
 A. 7296 2 1 affidavit as part of the deed recording process with the county clerk 2 and submit the same to the department of state. 3 5. Penalties. (a) The attorney general shall have the authority to 4 bring a civil action to enjoin or reverse any transaction that violates 5 the provisions of this section, and to seek disgorgement of unlawfully 6 held property. 7 (b) Any individual who knowingly violates subdivision two of this 8 section shall be subject to a civil penalty not to exceed twenty-five 9 thousand dollars per each violation. 10 (c) Any individual who knowingly files a false disclosure in violation 11 of subdivision four of this section shall be guilty of a misdemeanor, 12 punishable by a fine levied by the department of state not to exceed ten 13 thousand dollars for each false filing. 14 6. Regulations. The secretary of state is authorized to promulgate 15 rules and regulations necessary to implement the provisions of this 16 section, including but not limited to, defining reporting standards, 17 creating a form affidavit for beneficial owners, compliance processes, 18 and enforcement mechanisms. 19 § 2. The real property law is amended by adding a new section 295-a to 20 read as follows: 21 § 295-a. Beneficial ownership disclosure in residential real property 22 transactions. 1. Any deed conveying title to residential real property 23 where the grantee or grantor is a limited liability company shall be 24 accompanied by an affidavit identifying the beneficial owners of such 25 limited liability company, consistent with section eleven hundred one-a 26 of the limited liability company law. 27 2. Such affidavit shall be submitted contemporaneously with the deed 28 for recording with the county clerk, and failure to submit such affida- 29 vit shall render the deed unrecordable. 30 3. Each county clerk shall notify the secretary of state of any 31 conveyance involving a covered limited liability company and transmit 32 the accompanying disclosure affidavits within thirty days of recording. 33 § 3. Severability. If any provision of this act, or any application of 34 any provision of this act, is held to be invalid, that shall not affect 35 the validity or effectiveness of any other provision of this act, or of 36 any other application of any provision of this act, which can be given 37 effect without that provision or application; and to that end, the 38 provisions and applications of this act are severable. 39 § 4. This act shall take effect January 1, 2026. Effective immediate- 40 ly, the addition, amendment and/or repeal of any rule or regulation 41 necessary for the implementation of this act on its effective date are 42 authorized to be made and completed on or before such date.