If I create an LLC to do my property management am I illegally running a property management company?

[Ceril S.]

There has been plenty plenty talk here about forming an LLC or not. We decided to go ahead and create an LLC, but were told by our lawyer that after closing on the the property we wouldn't be able to move it over to the LLC until the title is filed and that takes time. So, that creates a gap in time. We want to keep the finances clean and run everything through the LLC but not sure how to receive $ under the LLC. I thought that I had read in another thread (that I can't find now) that I can lease the property from me personally to the LLC and then the LLC can therefore lease the property out and manage it.

My question is - 1) is this legal - for me to lease the property to the LLC and have the LLC lease it out? 2) Have I now started a property management company illegally since the LLC will be taking care of property that it doesn't own?

My question is also asking for advice about how to structure things. Eventually the LLC will have title on the property - then am I considered the owner when I work on the property?

Thanks for any advice!

[Chris Martin]

Some of your questions are best answered by a NJ attorney. But you can check to see what the definition of "broker" is in NJ. In NC, for instance, if the LLC is not charging an individual (e.g. you) a fee or other consideration, then the LLC is technically not brokering. Also the lease and sub-lease would be legal in NC. An LLC resolution enabling the LLC to manage property that is committed as a capital contribution (from a managing member's property) would be another solution, but again check with an attorney in your state. 

(not to be construed as legal advice)