"Subject To" / Insurance Policy..HELP!!! - Posted by Mark (Tampa)

Posted by Clint on November 03, 2005 at 12:34:59:


Thanks for your advice! I actually was talking to a commerical lender over the phone. The personal banker I deal with suggested that (BofA) since they ‘the banker themself’ has no jusidiction over a commercial loan. (since in an llc)…

I anticipated that I’d have to put it back in my name. NO biggie.

thanks again.


“Subject To” / Insurance Policy…HELP!!! - Posted by Mark (Tampa)

Posted by Mark (Tampa) on November 29, 2000 at 13:03:33:

A few months ago I got some super advice in answer to my post on this board. Along with the replies, and Bronchicks course I took control of a really nice house which I then Lease/Purchased to a buyer. Here is what I have run into though, and what I am facing now.

  1. Had owner put property into a Trust with my wife as
  2. Had owners assign beneficial interest over to me.
  3. Had owner write letter to insurance company explaining
    that they were putting property into a trust and
    and to adjust insurance records accordingly.
  4. I then recorded the ‘Deed to Trustee’ and did a
    Lease/Purchase to a Buyer.

Everything went very smooth until today the owner got a letter from their insurance company (USAA) saying it was no problem, but they needed their questionaire filled out first. Question 11 A., B., and C. all ask about beneficiaries. A. 'Have you transferrred real property to a beneficiary? What is their name and relation. B. Have you transferred all control of real property to beneficiary? Yes/No C. Have you transferred ownership of real property to the beneficiaries? Yes/No.

Have I gotten myself into a situation where the loan can be called due? I’d appreciate your help.

Tampa, FL

Re: The answer is NO, - Posted by Ed Copp (OH)

Posted by Ed Copp (OH) on November 29, 2000 at 20:37:58:

No, and No.

Beneficial interest in a Land trust is not real property it is “Personal Property”.

B-No (trustee has control of the real property)

At least that is my take on it, so you need to have the insurance policy changed to a non-owner occupied rental type.

Re: “Subject To” / Insurance - Posted by B.L.Renfrow

Posted by B.L.Renfrow on November 29, 2000 at 19:07:14:

I wouldn’t worry about the loan being called due because of the insurance company’s inquiry. If you used Bronchick’s letter, it just instructs the insurance company to convert the policy to a landlord-type (NOO) policy. I agree, it sounds as if perhaps that insurer doesn’t want to insure NOOs.

I wouldn’t answer falsely. If you do, and then you have a claim, the insurer could conceivably deny the claim based on your false responses. If all else fails, it may just be a matter of finding a different insurer.

Brian (NY)

Re: Subject To/ Insurance Policy…HELP - Posted by TomC (Md)

Posted by TomC (Md) on November 29, 2000 at 16:42:16:

I wonder if it is USAA trying to get out of the NOO (Non-Owner-Occupied) insurance business. I have 2 NOO props insured through them and they have contacted me to tell me that they will not renew the policy next year.

I have never paid late or filed a claim in the 8 years I have used them for property insurance.


Re: - Posted by Marty Weisberg

Posted by Marty Weisberg on November 29, 2000 at 16:00:30:


I am not sure exactly what the Seller asked the insurance company to do. When we set up the PACTrust the policy is set up to be a non-owner occupied (renter’s policy). This is not a problem and is certainly not meant to hide anything from the insurance company or the lender.


Re: Major Dilemna -Didn’t expect this. HELP! - Posted by Ed Garcia

Posted by Ed Garcia on November 03, 2005 at 10:58:52:


This is normal for a new LLC. You see, a new LLC is like an 18 year old with no credit, no income, and no assets, and therefore wouldn?t be a desirable borrower for a bank.
Since an 18 year old would require a co-signer, you?ll have to personally guarantee your deal.

All you have to do is go back to the bank and tell them that you?re going to personally guarantee the LLC, or pull the property out of the LLC in order to borrow against it personally.

You can then pull the property out of the LLC, borrow against it, and then put it back into the LLC. At that point you don?t even have to use that bank if you don?t want to; you can go to any lender with your deal.

I?m concerned about using that bank because even though you may not have known you can do what I just suggested, the bank would know, and for what ever reason didn?t suggest it to you. That tells me either the banker is lame and not aggressive for your business which is not what you?re looking for in a bank, or the banker doesn?t want your business, which I wouldn?t know why with what information you have provided.

What the banker should have told you was, that they can lend to your LLC ?which is an entity? but would require your personal guarantee. By doing this, you start to establish credit for your LLC

As time goes on, your LLC will eventually establish it?s self and will be able to borrow on it?s own.

Ed Garcia

Re: recommendations please - Posted by lil pa

Posted by lil pa on November 17, 2003 at 06:50:13:

Hello Carrie,

Where in pa are you? i’m near jenkintown.


Re: Out of curiousity…? - Posted by Frank Chin

Posted by Frank Chin on May 22, 2002 at 17:51:41:

Hi Osirus:

I vaguely recall the landlord countersued and won up to the small claim limit, I believe $5,000.00

The tenant stated that she started the fire, and couldn’t come up with a reason for landlord negligience.

I get the sense in renting out apartments through the years that tenants generally beleive that landlords always buy insurance, and it covers them if anything happens.

Frank Chin