A Win on Beneficial Ownership Reporting Requirements

Filed in Advocacy, Housing Finance by on December 11, 2020 0 Comments

This post was updated on Jan. 1.

In a win for NAHB, House and Senate negotiators have agreed on “beneficial ownership” legislation that addresses key builder concerns after NAHB negotiated directly with key congressional leaders.

Specifically, NAHB members will not be required to file federal reports on old or inactive Limited Liability Companies (LLCs), thereby avoiding an onerous and potentially financially damaging federal mandate. This language was attached to the annual National Defense Authorization Act (NDAA) Conference Report, which passed the House and Senate during the week of Dec. 7. Although President Trump vetoed the legislation, the House and Senate both voted to override the veto, meaning the bill has now been enacted into law.

While we continue to have reservations about the paperwork requirements our members will face, the legislation is great news for our industry and NAHB’s advocacy efforts.

The original legislation was much more onerous and would have required builders to disclose all of their LLCs, even LLCs that have been long defunded or otherwise shut down for years. Since real estate, land development and home building activities typically involve the creation of multiple LLCs over multiple years this language would have created a burdensome, if not impossible, federal reporting requirement uniquely targeting our industry.

Looking ahead, NAHB will continue to work with the Treasury Department and the Financial Crime Enforcement Network to address outstanding paperwork and compliance issues during the rulemaking phase.

For more information, contact Scott Meyer at 800-368-5242 x8144.

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