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47 On September 13, 2019, two changes went into effect in New York State that impact the ability of Limited Liability Companies to buy and sell residential real property. New York State amended Tax Law Section 1409(a) and added subsection (h) to Section 11-205 of New York City's Administrative Code. ese changes require transfer tax returns for residential real property bought or sold by a Limited Liability Company (LLC) to include information regarding the LLC's ownership. Tax Law Section 1409(a) states in pertinent part that "[w]hen the grantor or grantee of a deed for residential real property containing one- to four-family dwelling units is a limited liability company, the joint return shall not be accepted for filing unless it is accompanied by a document which identifies the names and business addresses of all members, managers, and any other authorized persons, if any, of such limited liability company and the names and business addresses or, if none, the business addresses of all shareholders, directors, officers, members, managers, and partners of any limited liability company or other business entity that are to be the members, managers or authorized persons, if any, of such limited liability company." Additionally, "if any such member, manager, or authorized person of the limited liability company is itself a limited liability company or other business entity, the names and addresses of the shareholders, directors, officers, members, managers, and partners of the limited liability company or other business entity shall also be disclosed until full disclosure of ultimate ownership by natural persons is achieved." Since September, the New York State Department of Taxation and Finance has issued a revised guidance and technical memorandum further explaining the changes in the filing requirements. Most importantly, the revised guidance and technical memorandum make it clear that these disclosures are not required for conveyances of residential condominiums. However, it does apply to mixed-use property improved by one- to four-family dwelling units. If the required information is not provided when the deed is presented for recording, the County Clerks will reject the deed. However, New York State has not changed the TP-584 form or provided an accompanying addendum. In an effort to address this, some counties have created and circulated sample addendums, while other counties are accepting any document that provides the requisite information. While these documents are being accepted, it is unclear how the county clerks are able to verify the information and determine whether or not it is sufficient. While these new changes are unlikely to have a significant impact on single-member LLCs, it does place a burden on larger, multi- member LLCs. As a result, it is likely there will be a trend towards forming other types of corporations, such as an Inc., which are not subject to this requirement. For clients that already hold residential property, it is highly recommended a living document is created to compile all information related to the members, managers, and any other authorized persons. ese live documents can be updated as the LLCs change and grow, otherwise it could become exceedingly difficult to convey property to and from an LLC in New York State. Megan J. Lyle received her undergraduate degree from the University of Rochester in 2012. She worked as a legal assistant at Davidson Fink LLP for two years prior to attending SUNY Buffalo Law School. Within the firm's default servicing department, she concentrates her practice on real estate and foreclosure, overseeing the firm's foreclosure sales, bankruptcy, and eviction departments. EMPIRE STATE LLC CHANGES POSE DIFFICULTIES Legal Industry Update STATE FOCUS NEW YORK By: Megan J. Lyle