Requires limited liability company to disclose ownership information when submitting deed for recording and establishes penalty.*

S399 1R FISCAL ESTIMATE

LEGISLATIVE FISCAL ESTIMATE

[First Reprint]

SENATE, No. 399

STATE OF NEW JERSEY

222nd LEGISLATURE

DATED: MARCH 26, 2026

SUMMARY

Synopsis:

Requires limited liability company to disclose ownership
information when submitting deed for recording and establishes penalty.

Type of Impact:

Annual municipal revenue increase.

Agencies Affected:

Municipalities.

Office of
Legislative Services Estimate

Fiscal Impact

Annual

Local Revenue Increase

Indeterminate

�

The Office of Legislative Services (OLS) finds that the bill
would result in an increase in local revenue from the penalties imposed on
limited liability companies in violation of the provisions of the bill.� The
OLS cannot estimate the number of companies that will violate the bill�s
provisions, or for how long the violation will persist.� Therefore, the amount
of the annual revenue increase is indeterminate.

�

The OLS concludes that there is a potential for an additional
local revenue increase from municipal liens imposed pursuant to a municipal
ordinance authorized pursuant to the bill.� The number of properties that will
be subject to municipal liens because of the bill in each municipality is
unknown.� Therefore, the potential increase in revenue from this source is
indeterminate.

BILL DESCRIPTION

����� This bill would require an affidavit identifying the
registered agent, or a member of the company, and the beneficial owner of the
company be appended to the deed, as recorded in office of any county recording
officer, of a real property intended for residential rental purposes
transferred to the ownership of a limited liability company.� The bill provides
that an affidavit required for a domestic or foreign limited liability company
includes: (1) the name and business address of the registered agent, or that of
at least one member of the company if the registered agent is not a member; (2)
the full legal name, date of birth, current business street address, and
identification number of the beneficial owner.� A limited liability company in
violation of the bill�s provisions would be subject to a fine of $5,000 per
violation payable to the municipality where the property is located, with each
month that the violation persists constituting a separate violation.� The bill
further authorizes a municipality to direct by ordinance that any charge, as
defined in the bill, issued to a domestic or foreign limited liability company for
real property intended for residential rental purposes pursuant to certain
codes become a municipal lien on the property.

FISCAL ANALYSIS

EXECUTIVE BRANCH

����� None received.

OFFICE OF LEGISLATIVE SERVICES

����� The OLS finds that the bill would result in an
increase in municipal revenue through fines imposed on limited liability
companies in violation of the provisions of the bill.� The fine is $5,000 per
violation payable to the municipality where the property is located and each
month that the violation persists constitutes a separate violation.� The number
of limited liability companies that will violate the provisions of the bill in
any individual municipality, and how long each violation persists, is unknown.�
Therefore, the amount of the increase in annual municipal revenue is
indeterminate.

����� The OLS also notes that the bill may result in an
additional increase in municipal revenue due to liens that may be imposed
pursuant to municipal ordinances authorized by the bill.� The number of
municipalities that will adopt ordinances, how many buildings will be issued municipal
liens, the impact of those liens on payment of charges due, and the value of
any property obtained by the municipality due to a lien imposed pursuant to an
ordinance authorized by the bill are unknown.� Therefore, the amount of the
possible additional increase in municipal revenue is indeterminate.� The
enforcement of any lien issued pursuant to this bill would result in additional
indeterminate local government and State court costs.

����� For informational purposes, Rutgers University
estimated that Statewide roughly 80 percent of one- to four-unit
properties were likely owner-occupied in 2022, a rate that has remained stable
since 2012. While the overall share of investor-owned properties (18 percent)
did not change significantly over the decade, corporate investors accounted for
a larger share in 2022 at nearly four percent of all properties or roughly 20
percent of all investor-owned homes.� Other categories of ownership included
properties owned by banks, nonprofits, and trusts.

Section:

Local Government

Analyst:

Grace Ahlin

Associate Fiscal Analyst

Approved:

Thomas Koenig

Legislative Budget and Finance Officer

This legislative fiscal estimate has been produced by the
Office of Legislative Services due to the failure of the Executive Branch to
respond to our request for a fiscal note.

This fiscal estimate has been prepared pursuant to P.L.1980,
c.67 (C.52:13B-6 et seq.).