I have transferred a number of propeties from my name into an entity. I always call the lender and tell them, or I tell them in the beginning. I have never heard an objection. I am individually obligated to the lender, and the trasnfer does not impair their interests.
If you have fears about this particular tenant, you might consider tansfering only her property into the LLC. and when she leaves, transfer the rest of them.
Definitely, check out a GL policy for each property.
Keep something in mind. The best laid asset protection plans can be eviscerated by crafty planitiff’s lawyers. There are a lot of legal theories which they can employ, with the purpose of extending liability beyond the entity-owner. For example, if you are mnaging your properties, a plaintiff can claim you were negligent in that management capacity. or if you hired an unlicensed person to do something, they have another shot at you.
Please don’t think that an LLC is bullet-proof. They are not.
Briefly, years ago I bought several properies for rentals. These properties are in my name only.
Recently I acquired a tenant of questionable character that makes me nervous (seems suit happy). This tenant leaves me with the impression that if she slips, I’m out to lunch…!
I’m considering forming an LLC with myself as the only member so if I do have a tenant that wants a piece of me, I can shield my personal home and assets.
Question is, forming the LLC is no problem, but how would I get the rentals I own under the umbrella of the LLC so it is public knowledge they are owned by the LLC…? Would I have to refinance them…?
Re: LLC, transferring properties - Posted by John Merchant
Posted by John Merchant on March 13, 2005 at 14:35:00:
You’d form the LLC, then deed (and record same) to new LLC. You’d want the LLC to bear some other name, and be done for you by a lawyer, relative or close friend so it wouldn’t bear your name or address.
You’d certainly want to cover the property with liability insurance asap.
Also I’d think about moving that tenant on asap as it’s probably only a matter of time before she does find some excuse to sue you.
In this regard, I think maybe I’d have the new LLC’s manager (not you) write her and tell her she’s going to have to vacate the property while the new owner LLC does some work on the property, and give her notice to move.
And tell her in the notice that the LLC now has her damage deposit and is certainly going to be returning her damage deposit as soon as she’s out and the manager can do walk-through to confirm the great condition she’s left in her wake.