A well intentioned bill may have some loopholes. Hopefully they will be addressed properly prior to enactment. Definitely a step in the right direction.

In a recent article discussing the subject Bill, there were some interesting quotes;
“Currently, municipalities may deny permits to individuals who are delinquent, but not LLCs. Williams said some bad actors are using this loophole to force municipalities to approve permits despite their delinquent status.”

Commentary: This should be an option as well for outstanding code violations (appears current language does allow for individuals and a “serious violation” with court ordered fines etc.). Is the issue unpaid taxes on the property where a permit is being pulled or is an issue of outstanding taxes on other properties in the municipality/county. I would venture it’s the latter. If it is the latter, then LLCs will work around this by simply opening a new LLC and transferring ownership.

“The bill would also allow municipalities to deny permits to an LLC if one of the principals of the LLC has delinquencies in the municipality.”

Commentary: This would indicate the aforementioned thought process is correct. However, municipalities struggle to identify principals of LLCs as they are typically not public information. Many LLCs have become adept at “hiding behind the corporate veil”. Will be difficult to enforce and derive the intended benefit.

 To view the article, please click here.

To view the text of proposed bill and current status, please click here