Limited liability companies, or LLCs, have made up an increasing share of the real estate market since the 1990s as property buyers have used them to conceal their identity or protect against personal liability.
According to the Census Bureau’s Rental Housing Finance Survey, about 15% of all rental properties and one-third of all rental units were owned by LLCs in 2015, and 9% of all home sales in 2017 were made to LLCs, according to ATTOM Data Solutions. The share of rental properties held by individual owners has fallen from 92% in 1991 to 74% in 2015, due largely to the rise of LLCs, according to The New York Times’s Emily Badger.
However, in some cases, LLC owners have used their anonymity to enable money laundering, avoid responsibility for tenants, or walk away from blighted properties and mounting taxes.
In Memphis, Tenn., parcel surveys of the city have revealed that a majority of the most blighted properties belong to L.L.C.s. Many have effectively gone out of business without selling the homes, leaving their ownership in limbo. When the city has tried to hold some responsible, there is no one to contact — the duties of those listed as registered agents having expired along with the companies.Read More