Personal Name vs. LLC to help get rid of squatter/does it matter?

Question

I recently completed my first investment purchase - a distressed home via auction.com. The previous owner was in the home when purchased and I have been battling with him in court since early May to get him out of the property. I bought the property in my name and made sure to get insurance. He has been picking up on any nuance and filing a ton of motions to extend his free stay at the property in NH. My lawyer is advising to convert the property to an LLC (at a $1K charge by him of course) and that will strengthen the case.

My Questions:

#1 - Understand may need more details but in general is converting my first purchase to an LLC really going to strengthen a case to get a past owner out of the property?

#2 - Setting up LLC in NH - $1K seems a bit much to set up - cheaper avenues I can pursue to do one?

#3 - Are there any other costs in NH ongoing if this is now in an LLC? Are there annual filing fees now?

#4 - I am planning to hold this property - any implications for my husband taking possession of property if something happens (If held in LLC in my name?)

Thanks for any insight on any of these questions. This forum is amazing!

Tucker McCarthy · Answer

Hi Liz,

Can answer a few of your questions

#2 - It costs $100 and takes about 10 minutes to set up an LLC and can all be done online in NH. Just google New Hampshire Secretary of State Corporate Division and go to NH QuickStart. You'll get an email with your filing in less than 24 hours (typically).

#3 - Annual filing fee is $100 and is a 2 minute online form.

Mike Cumbie · Answer

Hi @Liz Murphy,

I'd listen to your lawyer on this one, it's what you pay him for. He may simply be realizing that this guy is about to "fall" off the roof and then come after you and your house, kids college funds and retirements.

Just my 2 cents, good luck!

Tony Blanco · Answer

I agree with everyone's posts, however, I think the only thing missing it the fact that even if you create an LLC, the property is still in your name. Your property will need to be moved from your name to the LLC. This may be part of the lawyers fees.

I don't see how the LLC will strengthen your case, but it might be something to look into for asset protection.

I would speak with a title / closing company about the costs to change the name and see if it's worth it to you.

Dan K. · Answer

Ask your attorney why setting up an LLC would help your case. It's a big red flag in my opinion If he can't clearly answer the question.

This is outside of your question, but in Massachusetts a business cannot represent itself in any court besides small claims court.

Ann Bellamy · Answer

While my business is in MA, all my rentals and my residence are in NH - so......

After you set up the LLC per the instructions above, you'll still need an operating agreement, which most people skip. But don't skip it. You'll need an attorney for that.

Having said that, I don't see the difference either - between an LLC owner and an individual owner. You bought it, you want possession. However, the particulars when the previous owner is in residence are usually a special set of circumstances. I'd reach out to another attorney for a consultation. Try Andy Sullivan in Bedford, tell him I said Hi.

#3 - all states have annual filing fees for LLCs. NH is $100 per year

#4 - I think your husband's taking possession if something happens to you is related to how you set up the LLC and/or how your estate planning is set up, again, talk to that attorney.

Troy Zsofka · Answer

Hi @Liz Murphy

@Tucker McCarthy took the words out of my mouth (keyboard, whatever...).

The only other thing you'll need to do is request a Federal EIN; also simple.

I don't see why having it in an LLC would help, but I'm not an atty. Definitely something to ask your atty to see if he has a cohesive answer. If he doesn't, I would start to become concerned about why this simple possession case is taking so long (3 months for an eviction case with no clear end in sight is long in NH in my experience, unless the plaintiff messed up something procedurally). Perhaps it's because the former owner wasn't a tenant so it's more complex than a simple non-payment of rent issue? Or, perhaps it's because attorneys like to drag things out because they stop getting paid when the case comes to conclusion...

Good luck

Wayne Brooks · Answer

Can’t imagine how the owner being an llc would help at all.....it’s a straight up possession by a new owner.

Personal Name vs. LLC to help get rid of squatter/does it matter?

Personal Name vs. LLC to help get rid of squatter/does it matter?

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