Legislation sponsored by Senator Sam Thompson that would make it easier for municipalities to pursue rental property owners for building code violations cleared the Senate Community and Urban Affairs Committee today.
“So many rental units in our neighborhoods are being purchased by shell corporations that exist only on paper. When there are violations or other problems, municipal officials don’t know where to turn to get the issues resolved,” said Thompson (R-12).
The Senator’s bill, S-564, would require LLCs to disclose the names of the company’s registered agent when recording deeds for homes with as many as four dwelling units.
“This would lift the veil of anonymity from limited liability companies that own residential property,” Thompson said. “When these corporations file a property deed with the local government, they would now have to identify the name of a responsible party.”
All entities recording deeds for properties with one to four dwelling units would be required under the bill to provide an affidavit identifying all responsible individuals. If the property is owned by an LLC, the bill calls for disclosure of the people with ultimate ownership of the business.
“It’s frustrating when residents and even municipal code enforcers don’t know who to turn to have problems addressed,” Thompson said. “Making the names of responsible parties available eliminates a significant obstacle.”
This bill is based on a similar law enacted in New York State in 2019, intended to increase the accountability of LLCs for building code violations.