Bulletin: NY000630

This is an update to Bulletins NY000627 and NY000627a, in that we have received multiple items of guidance from the State and NYC taxing authorities, as well as the experience of our offices and agents in recording deeds since the law’s passage.

Before Stewart’s amended advice below, we will lead off this Bulletin by advising that due to the continuing, and at times, conflicting guidance received from the interpreting authorities since the law’s passage, that all offices and agents consult the City and State taxing authorities’ websites on a regular basis.  The links[1] are as follows:

NYS Department of Taxation and Finance:  https://www.tax.ny.gov/bus/transfer/rptidx.htm#conveyances

NYC Department of Finance:

https://www1.nyc.gov/site/finance/taxes/property-real-property-transfer-tax-rptt.page

Note: [1] Because the information is continually changing, and because links can become broken or obsolete, it is recommended that you periodically print and keep in your file the webpages contemporaneous to LLC-party recordings.

On September 13, 2019, the State of New York enacted Chapter 297 of the Laws of 2019, which amends New York Tax Law § 1409(a) and adds a new subdivision (h) to § 11-2105 of the NYC Administrative Code.

While the full text of the Act is appended hereto, in summary, the Act requires that transfer tax returns for the sale of a residential 1-4 family, be they NYC or State, to be:

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.  The identification of such names and addresses shall not be deemed an unwarranted invasion of personal privacy pursuant to article six of the public officers’ law.  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. For purposes of this subdivision, the terms “members”, “managers”, “authorized person", "limited liability company" and "other business entity" shall have the same meaning as those terms are defined in section one hundred two of the limited liability company law.

Note that the act applies only to residential 1-4 family properties, and despite conflicting advice received from the State previously, it has been confirmed that it does NOT apply to single condominium units nor single co-op apartments.

As before, the information to be supplied is for both grantors and grantees.

Stewart is recommending that you use the attached Transfer Tax LLC Information Disclosure Forms, or a similar document. For your convenience, we have provided two updated versions of the Transfer Tax Form (linked below)

Transfer Tax LLC Disclosure Form v2 has been modified to remove the SSN/EIN requirement.

Transfer Tax LLC Disclosure Form v3 has been created to include the SSN/EIN field, should some counties still require this information.

If any party should have this form rejected by a County Clerk, please let Stewart know immediately.

Finally, Stewart has amended its exception to be placed in all title reports by removing the reference to co-ops and condominium units:

EXCEPTION/REQUIREMENT:

This Company is required by New York City and State Law to collect certain additional information from you and the parties representing you regarding the purchase of real property. Chapter 297 of the Laws of 2019 requires the collection of information regarding the purchaser or seller of a residential 1-4 property, where that purchaser or seller is a limited liability company.  You may be required, as a condition of the issuance of the policy to provide additional information that will be reported along with the filing of the State or New York city transfer tax return. Please contact this company and provide the details of this transaction in order to comply with this requirement and avoid delays at closing.

In the event you have any questions regarding the above please contact Stewart Title Legal Department at 212-922-0050 and speak with any Underwriting Counsel.

The Transfer Tax LLC Disclosure Form v2 and v3 are available on our website’s Legal Form’s section under Transfer Tax and Returns. Link as follows:

https://www.stewart.com/content/stewart/stewartcom/en/stg/new-york/underwriting-resources/legal-forms.html

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.

Forms: Transfer Tax LLC Information Disclosure Form v2; Transfer Tax LLC Information Disclosure Form v3
Attachments: Chapter 297 of the Laws of 2019