Orangetown Appears Serious About Unmasking Hidden Owners of Properties

Public hearing set for June 13 on “full disclosure law”  

BY ROBERT KNIGHT
CITY EDITOR
ROCKLAND COUNTY TIMES

Orangetown is moving closer to adopting a “full disclosure” law, which mandates the actual owners of all real property in the township publicly identify themselves whenever they seek a building, zoning, planning or other land use approval.

The law, if adopted, would require that in order to obtain a permit for any type of land use change or approval, including building permits, personal names, addresses and contact information of all owners must be provided to the town, not merely the corporate name or the common subterfuge of hiding behind an LLC (limited liability company).

An initial public hearing on the proposed law was held last week at Town Hall, but had to be continued at a later date  because no input was received from the Rockland County Planning Department. With that input expected this week, the Town Board agreed to continue  the hearing at  its meeting of June 13. Following a reading of the county’s opinions of the legislation, along with town responses and additional input from speakers from the audience, the council is expected to approve the new law unanimously.

The proposed law, the first of its kind in Rockland County and one of the first state-wide or nationally, was drafted jointly by Town Attorney John Edwards, Deputy Town Attorney Rob Magrino and Councilman Thomas Diviny of Blauvelt, who is also an attorney specializing in real estate transactions. .

Building Inspector John Giardiello, whose office processes all land use permit applications, said he, too, favored adoption of the proposed law because it would create “transparency” regarding exactly who owns property that is the subject of a request for a building permit, zone change or other land use request.

At present Giardiello and others said, some applications are submitted under the ownership of “The ABC Limited Liability Company” (LLC) and a post office box number, with no clue as to who is actually behind that application and would be the beneficiary of the use or change being sought.

This lapse of full disclosure could lead to dangerous conflicts of interest, town officials noted, in the case of, for example, a situation in which a member of the planning board might have a business or family connection to somebody involved in an application for site plan approval, but the identities of the applicants are hidden behind the veil of an LLC. Full disclosure could prevent this conflict of interest and enable land use board members to recuse themselves from any decision in which they, or a family member, have an economic interest.

Also, Supervisor Stewart pointed out, this disclosure of ownership interests during the application process ultimately makes it easier for town officials, such as the fire inspector or coe enforcers, to contact property owners and hold  them accountable to town laws as the need arises.

If adopted as drafted, the law would cover not only LLCs but any one of a variety of land ownership entities such as corporations, limited liability partnerships, general or limited partnerships, professional corporations, joint ventures, “doing business as” (DBA) firms, management companies, associations and similar businesses.

[a1] As drafted, the law asserts that “The town Board finds and determines that there is a critical and compelling need, in the public interests as set forth herein, to provide for full and fair disclosure of all privately held and/or non-publicly traded entities making land use applications before the town to the extent possible to ensure that any and all potential conflicts of interest or other ethical concerns are properly disclosed and addressed by any and all affected parties.”

Whenever an LLC or similar business entity applies to Orangetown for any building permit or land use change, the application must include the actual names and addresses of all owners, partners, limited and general members, shareholders, officers and directors and any other authorized persons having control over the property and the authority to submit the application.

The application form the LLC must use is a town form called an Entity Disclosure Statement which must be “affirmed or sworn to under the penalty of perjury and shall be filed along with any such land use application or request for permission to undertake any construction activity within the town.”

The law also contains a provision designed to prohibit such companies from obtaining a permit under one name, and then subsequently transferring it to another LLC that hasn’t disclosed its owners.

“In the event that, prior to the issuance of a Certificate of Occupancy (by the Building Department) for any project under this article,” the law states, “a project that has previously received approval is in any manner transferred, whether by transfer of the property or transfer of the management and/or operation of the original entity making application to another entity, the transferring entity shall notify the town and such succeeding entity must fully comply with this article before any work on the project shall be permitted to proceed.

“It shall be the responsibility of both the applicant and the entity to which transfer is being made, to notify the town of any such transfer,” this section of the law concludes.

In describing what town actions would trigger use of the new law and the filing of a disclosure statement, Magrino said that law would apply to any application for a building permit change in land use or approvals and permissions sought from the building department or any of the town’s four land-use boards: the Planning Board, the Zoning Board of Appeals (ZBA), the Architecture and Community Appearance Board of Review (ACABOR) and the Historical Areas Board of Review (HABR).

He said the law exempts certain smaller projects  such as  minor single residential improvements, additions or remodeling which does not involve any change of use or increase the overall size of the building. Such exemptions would cover projects such as new siding or roofing or windows, additions of dormers or porches, garages or swimming pools, or similar projects individual homeowners might normally seek on their properties.

In the case of entities which must comply with the new law, the penalties can be fairly steep, Magrino told the board.

They can include suspension of the approval, and of any actual work on the site in question, the issuance of “Stop Work” orders to halt any work in progress and the imposition of fines, not to exceed $5,000 per violation. There could also be civil penalties of not more than $3,000 for each offense.

Councilman Diviny, who resides in Blauvelt and has a law office in Pearl River, said he had done considerable research into this legislation, and found that at least three municipalities in New York State had already enacted similar laws, with favorable results. In Rockland County Orangetown would be the first, he said, adding that he suspects the other four townships and most villages would probably quickly follow suit.

Three members of the audience spoke in favor of the new law during the public comment period of the hearing last week.

Michael Mandel of Pearl River, a member of the Planning Board and the Chairman of the town’s Board of Ethics said the new law gives transparency to land use actions in Orangetown. It would also give him and other members of the boards an insight into who actually owns some of the properties whose LLC corporate owners often appear on behalf of, but never disclose the names of their clients, who are the actual owners.

Chris Dunnigan of Pearl River, a member of the ACABOR, suggested that whenever a property is sold to an LLC or other such corporate or business owner, the ownership form should be updated in town files. He also suggested higher penalties for repeat offenders, and objected to some of the exemptions for minor work contained in the current draft legislation.

The final speaker was former Town Supervisor Thom Kleiner of Sparkill, who is running for that position again this fall on the Democratic line. He praised the new law, calling it “terrific” and “logical”, and predicted that other municipalities in Rockland County would probably quickly follow suit and adopt similar legislation.

At the June 13 continued public hearing, the Town Board is expected to read into the transcript any comments received from the Rockland County Planning Department. If any of those comments are negative, or require a response, board members indicated they will respond at the conclusion of the hearing, and if necessary, exercise their right to override any comments by the County Plannnig Department that are unfounded.

They will then open the floor to comments from the public, close the hearing, and probably take an immediate vote to approve the proposed legislation, Diviny predicted.

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