Can I Quit Claim to LLC

Question

If I own a condo and am behind on HOA dues can I quit claim my property to a LLC to protect me from liability?

Stanley Bronstein · Answer

Can you quitclaim the property to your LLC? Sure ...

Will it do you any good? Probably not ...

The advice given to you by the previous responders to negotiate a payment agreement with the HOA is probably the best course of action.

Veronica Limia · Answer

Brad, I regularly represent owner's/investor's in disputing the previous owner's association debt, and successfully clear the debt in many cases. It really depends on a lot of factors, but the first place you need to look is the Association's Declaration.  As for the quit claim deed, in most cases that wouldn't work, you would still be jointly liable with the new owner, but again it depends on various other factors. Feel free to inbox me if you have more questions.

Disclaimer: this is not legal advice and does not create an attorney client relationship.

Brad Warshaw · Answer

Ok thanks it is from HOA dues from last owner. If it goes to foreclosure would I be liable personally after the sale for what ever balance they didn’t recoup?

Curtis Bidwell · Answer

Short answer, “No”.  You can’t cheat the system (why are you trying to get out of a known debt?).  As has already been said, any action will be against the property, you’re name just gets caught in the middle.  Doesn’t matter when they get the lien it will still attach to the property and won’t go away until they get paid.

My recommendation is you start talking with them and arrange an appropriate payment plan to keep you out of court and not add unnecessarily to your costs.

Brad Warshaw · Answer

There are back taxes too with a application for tax deed sale so I think they may have a tuff position because they don’t have a judgement and will take a while to foreclose and taxes can beat them to it. I just got this through the foreclosure auction from another HOA lien. if I quit claim to a LLC before they file lien does that protect me? Thx

Ray Johnson · Answer

@Brad Warshaw If it's a good HOA that knows what they are doing, the first step they are going to do as the HOA is to place a Lien on the property, This will prevent the owner from selling the property without them getting paid all back dues, attorney fees, late fees, Interest, and any other cost associated with them getting the past due fees collected.

The next step is going to be for the HOA to foreclose on the property if they still don't get paid. If there's no mortgage on the property the HOA will get paid all monies due to the HOA as a part of the sale and the owner gets the remaining balance.

Basically the HOA will get paid one way or another, it's just a matter of how much more money the owner wants to give the HOA by delaying payments.

Brad Warshaw · Answer

There is no mortgage on it. I would do it to avoid being named in judgement from HOA if I stop paying. What do you think? Thanks

Bob Okenwa · Answer

@Brad Warshaw

I am not a lawyer, so you may want to seek legal counsel from a licensed professional. Regardless of who the property is titled under, the HOA can still enforce foreclosure powers if that is something that is allowed where you live. If you purchased the condo in your name, a foreclosure will still show on your credit report should it get to that point as your name is still on the mortgage note, even if it is quit-claimed to an LLC.

A quitclaim deed affects ownership and the name on the deed, not the mortgage. The grantor remains liable for the mortgage even after ownership has transferred through the execution of a quitclaim deed. This is because quitclaim deeds transfer title but have no effect on mortgages.