Bill awaiting Gov. Kathy Hochul's signature would make it easier to find out who owns a building in New York State
NEW YORK -- Why is it so difficult to find out who owns a building in New York State?
Many companies are registered to LLCs and shell companies, but a bill awaiting Gov. Kathy Hochul's signature would change that.
CBS New York investigative reporter Tim McNicholas looked into what the new law could mean for New Yorkers and how it ties into last week's partial building collapse in the Bronx.
Before Emily Gallagher started representing Greenpoint, Brooklyn, in the New York State Assembly, she was a neighborhood activist advocating for tenants' rights. One of those rights is knowing exactly who owns your building.
"With the Bronx building collapse, this is absolutely frustrated me and broke my heart because this is exactly what this bill is targeting," Gallagher said.
Records for that Bronx building from the city's housing preservation department listed one name as the head officer of the LLC that owns the building. Department of Buildings records from the last few years listed two other names as owners.
When we tracked down someone who said he was building's landlord, he gave yet another name.
"Right now, there's no way to know who owns an LLC. So if there's any issues with that business, it's very difficult to hold that actually business accountable," Gallagher said.
That is why Gallagher introduced the LLC Transparency Act. It passed with bipartisan support.
If the governor signs the bill, it would create a public database which would list the names of those who benefit from the company; it would be the first in the nation.
"There are other countries that have cities that already use this. For example, London in England has already done this step, and it's really helped people understand the relationships between, for example, the press, buildings, corporations," Gallagher said.
- Related story: Bronx building collapse raises questions about what New Yorkers can do to make sure their buildings are safe
But some landlords and business owners say the bill puts a target on the backs of those just trying to make a living.
The Real Estate Board of New York sent CBS New York a statement, saying in part, "A publicly available database would create privacy and identity theft risks for New Yorkers and risks weakening New York's economy."
Chelsea Lemon with the New York Business Council agrees.
"A public database could jeopardize, you know, people's information, have it out there. It could used for blackmail or extortion, or worse yet, it could be used by a foreign government," she said.
The bill partially mirrors the Federal Corporate Transparency Act, which aims to stop people from using shell companies to launder money and avoid economic sanctions.
"The primary part of this bill is to go after illegal activities, which we support. I think transparency is important. However, the public database is really jeopardizing the safety of our small business owners," Lemon said.
"The reason why we really want that public database is because it will allow people who have bad-acting LLCs in their lives to be able to take that step themselves. We have put in guards for privacy. We've put in an anonymity opportunity for folks, and this is something that does work," Gallagher said.
Hochul has until Sunday to sign or veto the bill. We sent the governor's office several questions about this bill, but they would only tell us she's reviewing it.
If you have a story that needs investigating, you can reach our team by email at CBS2investigates@paramount.com or by calling our tip line at 1-646-939-6095.
Editor's note 12/23: Gov. Hochul signed the bill on Dec. 23 without the public database portion. Assemblymember Emily Gallagher and Senator Brad Hoylman-Sigal released the following statement:
When we introduced the LLC Transparency Act (S995B/A3484A) in March 2022, our goals were threefold: 1) to raise the issue of anonymous, unaccountable shell companies as a top policy concern in New York, 2) to provide local and state government access to previously hidden ownership information so they could effectively enforce laws and codes, and 3) to create a public database to hold accountable secretive companies exploiting tenants and workers.
With the Governor's signature today, we have achieved two of these objectives.
For the first time, state agencies and local governments will know who owns anonymous LLCs operating in New York and be able to hold them accountable for violations of the law. Landlords who refuse to properly maintain their buildings, companies stealing wages from workers or abusing the environment, and sanctioned oligarchs buying up Manhattan real estate are now on notice. Today's agreement also creates new state authority to pursue and penalize LLCs who refuse to disclose their true owner. New York joins the international community and now leads among the states in tackling the rise of secretive shell companies as a serious policy concern with consequences for tenants, workers, government, and business.
Unfortunately, this law does not create the publicly available database that we fought for and that the Legislature passed with significant majorities. Disclosure to state and local governments is an important first step but it is not transparency. Tenants deserve to know who they pay rent to, and employees should know who owns the companies mistreating them. That fight is not over.