Transferring properties to LLC

[Samir Shahani]

Hi all,   

My brother and I own 2 properties. 1 in his name. 1 in my name. We operate an LLC (50/50 ownership).

Is there an easy and cheap way to transfer the properties to the LLC?

All of the above is in Pennsylvania (in case that makes a difference).

Thank you.

[Chris K.]

@Samir Shahani

Before you do anything, remember that Pennsylvania has realty transfer taxes. The transfer between you and your brother --- as individuals --- to the LLC will trigger the tax. You will have to pay the full amount based on the fair market value of the property. As a result, the bulk of the cost associated with this process is going to come from that. Assuming you are okay with paying the transfer tax, all the other costs should be minimal.

I don't really see any point in doing it through a Quitclaim deed. I would just do it as a general warranty deed. 

Note that depending on what the LLC between you and your brother does, you may not want to hold the real-estate using that LLC. For example, if the LLC is for an actual operating business, it really wouldn't make sense to use that LLC to hold real-estate.

Finally, I always give a warning that 50/50 LLCs are very tricky to deal with when something goes wrong. Not saying you shouldn't do business with your brother, but you want to be careful and think through all the contingencies. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it as legal advice. Always consult with your attorney before you rely on the above information