Quitclaim deed in Arlington Heights IL 60005

[Adriel Cisneros]

Hey folks! 

I (grantor) own a single unit rental property in Arlington Heights with the intent to quitclaim the deed to my IL LLC (grantee).

Here is my ask:

I need an attorney to both review the due on sale clause on the Deed of Trust and serve as the registered agent for the IL LLC.

[Randy Rodenhouse]

I don't think you need an attorney to find out if there's a due on sale clause in your mortgage since almost all mortgages have the due on sale clause especially if originated by a major lender/bank. You said deed of trust and would be surprised to see Deed of Trust in IL.  With respect to the registered agent, I would just use a company like Incorp for the registered agent since only cost around $100 a year.

[Adriel Cisneros]

Quote from @Randy Rodenhouse:

I don't think you need an attorney to find out if there's a due on sale clause in your mortgage since almost all mortgages have the due on sale clause especially if originated by a major lender/bank. You said deed of trust and would be surprised to see Deed of Trust in IL.  With respect to the registered agent, I would just use a company like Incorp for the registered agent since only cost around $100 a year.

So does this mean I won't be able to transfer the property to the IL LLC?

[Randy Rodenhouse]

Yes you can transfer since you are deeding to an LLC we're you are the beneficiary. I have done this many times. Plus rarely do the banks exercise the due on sale.

[Chris Seveney]

@Adriel Cisneros

Why are you moving it to your LLC?

If it is for asset protection it’s not gonna work.

Transferring to a LLC via quitclaim deed and the LLC not buying the asset is not considered a transaction that passes the sniff test from the LLC being separate from you as a person.

Just get an umbrella insurance policy

Also the reason why no one ever mentions this is because no one is ever sued on a single family rental for anything consequential.

[Adriel Cisneros]

Thank you @Chris Seveney

Simply anonymity. 

My bigger concern was not being able to refinance from an FHA into a conventional loan in the very near future IF the deed is now recorded under the new LLC.

@Randy Rodenhouse 

Appreciate the thoughtful responses. 

[David A Lisowski]

@Adriel Cisneros

That's correct. You will not be able to refinance into a conventional loan using an LLC on title. Government-backed loans (FNMA, FHLMC, FHA, VA, USDA) do not allow LLCs.

So if you transfer title to LLC, then go to refinance, you will have to transfer back to your personal name in order to close the refinance loan.

[Adriel Cisneros]

@David A Lisowski

Fantastic point and certainly not worth the headache. 

I also read on other forums where transferring the deed to an LLC will also impact the insurance coverage which will immediately notify the lender.

Appreciate the remedy. 

Have an outstanding start to your week everyone.