April 17, 2024—Public Advocates Senior Staff Attorney Suzanne Dershowitz spoke with AP Reporter Trân Nguyễn about SB 1201, the Limited Liability Corporation (LLC) Owner Transparency Act, and her personal experience trying to unravel a web of LLCs to hold the owners of unsafe rental housing accountable.
“The practice of operating business anonymously is prevalent in many California industries, proponents of the bill said. In Oakland, after city officials condemned a dilapidated building rented out to low-income immigrant families, the city attorney’s office spent more than a year investigating and combing through hundreds of city code enforcement records to find the owners of the building, said Suzie Dershowitz, who worked on the case at the time. The city eventually found and successfully sued the landlords, who owned more than 130 properties in the city through a network of LLCs and corporations. The investigation would have had taken half a day of work if Durazo’s bill was law at the time, she added.
‘As a government agency, I had access to a lot of information, said Dershowitz, who now works for Public Advocates, an advocacy group sponsoring the bill. “But the lack of transparency in corporate ownership really hampered our investigation.’”
Anonymity is not necessary to achieve the legal and financial protections afforded by forming an LLC and often frustrates enforcement efforts. Property owners hide behind LLCs to avoid accountability. It can take years to identify and prove a single person is responsible for repeated violations across multiple businesses – delaying justice, wasting public resources, and driving up costs to the detriment of all Californians.
SB 1201 would make it easier to enforce existing laws to protect the people who live and work in our communities across the state, increase government efficiency, and ultimately save taxpayer dollars.
