As noted in Industry Bulletin 2019-04, a copy of which can be found here, the Company would advise of any developments concerning the Act. At the end of last week, the Department issued guidance (“Guidance”) on the Act which can be found at the following link: https://www.tax.ny.gov/bus/transfer/rptidx.htm#conveyances. Any capitalized terms not defined herein shall have the meaning ascribed to them in Industry Bulletin 2019-04.

Please note the following concerning the Guidance and some matters unaddressed by the Guidance:

• Although not required by the Act, the Document must not only contain the names and business addresses but also the taxpayer identification numbers (“TINs”) of the parties listed in the Act. The Department asserts that it has the authority to require TINs pursuant to Tax Law §1409(d).
• The Guidance does not provide a required form of Document. The Document must simply contain the substance of what is required by the Act as supplemented by the Guidance.
• The Guidance is silent regarding the applicability of the Act to mixed-use properties. Nevertheless, based on informal feedback from the Department, any mixed-use property that contains up to four-family dwelling units should include the Document when submitting the applicable transfer tax forms.
• The Guidance states that the Document “…should demonstrate that 100% of the ownership of each entity has been reported.” The Department has informally advised that percentages of ownership should be provided in the Document.
• The Guidance does not provide any information concerning direct or indirect beneficial ownership of the LLC by a Trust. The Department has informally advised that the present beneficiaries of the Trust must be disclosed in the Document.
• The Guidance also does not provide information concerning direct or indirect beneficial ownership of the LLC by an investment fund, publicly held corporation or any other similar entity that could be comprised of hundreds or potentially millions of investors. Despite the fact that disclosure of the ultimate natural persons who have ownership interests in such entities may be unmanageable or virtually impossible, the Act still requires this level of disclosure within the Document.

We acknowledge that the Act creates a significant burden on our clients. Unfortunately, until the Act is successfully challenged in some manner by negatively impacted stakeholders, we must comply with the Act.

The Company will keep you advised of any developments regarding the Act.

Please contact Drew Steigler, Chief Underwriting Counsel, at
631.424.6100 or dsteigler@advantagetitle.com with any questions.