Md House Bill 960 Would Allow Housing Authorities to Form Llcs

Summary

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Maryland housing authorities, which own and manage affordable housing at the local level, might soon be allowed to partake in a special business venture popular in the private market due to its legal flexibility. House Bill 960, introduced Feb. 9, would allow housing authorities to form limited liability companies, or LLCs, a kind of business entity that acts like a cross between a corporation and a partnership. LLCs limit the accountability of its members to an entity's particular assets and do not have the restrictions of a corporation, such as prohibiting foreign shareholders or membership in an affiliated group, according a definition from the state comptroller's Web site.

Without this tool, development is more cumbersome and restrictive and costly, said Dennis Nicholson, executive director of the Housing Authority of St. Mary's County. But laws governing housing authorities predate the existence of LLCs in Maryland, which did not take effect until 1992, according to the state comptroller's Web site. Since then, LLCs have become more popular with private individuals who want to limit their liability without corporate regulations. Housing authorities often rely on partnerships with private investors to develop affordable housing and leverage federal tax credits. They would have an easier time finding partners if they were able to work with the now popular legal entity, said Anilkumar Neil Hoffberger, a lawyer with Abramoff, Neuberger and Linder LLP.

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Md House Bill 960 Would Allow Housing Authorities to Form Llcs

It enables the authority to conduct business in the mo...

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