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The saga of controversial D.C. landlord Sanford Capital highlighted a lack of transparency in the District's residential ownership policies that one lawmaker hopes to fix.
D.C. Council Member Elissa Silverman proposed a bill to force all individuals with a financial interest in LLCs that own residential property to disclose their names to the District, the Washington Business Journal reports.
Forming a D.C. limited liability company, a common structure for owning real estate that allows members to minimize risk and share the financial burden, currently requires information about the registered agent and a $220 fee. Silverman's bill would allow the D.C. Department of Consumer and Regulatory Affairs to require the disclosure of all investors associated with residential LLCs.
DCRA's director supports the bill, telling WBJ it would allow the agency to track individuals associated with multiple LLCs that own mismanaged properties. Sanford Capital, the most well-known example of such a landlord in D.C., faced multiple lawsuits from D.C. and other organizations after investigations exposed poor living conditions at its apartments across the District. The landlord later decided to sell its D.C. portfolio.
But some real estate attorneys told WBJ the bill could have negative repercussions by discouraging investors from putting money in D.C. developments because of concerns over increased scrutiny. They also identified potential workarounds that could prevent the bill from achieving its purpose of increasing transparency.
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