Need A Legal Work Around To Close A Deal

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Need A Legal Work Around To Close A Deal

Carl Millsap
Investor · Midwest · Member since 2019 · 339 posts · 226 votes

We have a contract on a property. The owner has the property in an LLC that has been dissolved by the State because they haven't filed annual reports or taxes since they set-up the LLC.

The owner filed to have the LLC reinstated but the State Revenue office denied the request stating they must file taxes for the previous years, pay any back taxes and penalties.

The owner wants to close the deal before the end of year.

Is it possible to have the LLC which has been dissolved quitclaim the deed to the owner so we can close the deal?

Do you know of any other way to transfer the property?

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Jonathan R McLaughlin
Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
5y

@Carl Millsap best bet is not to make this your problem. If he wants to close before the end of the year he will fix it. I think buying the LLC would prevent any kind of 1031 later too.

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  • David Wandel
    Real estate investor · Pasadena, MD · Member since 2016 · 165 posts · 258 votes
    5y

    You could buy the LLC, which would also save all closing costs. The downside to this is that you are inheriting all the liabilities of the LLC. If this was the only property the LLC owned and all that wasn't done was filing the annual reports I wouldn't think it would be too much. Here , in Maryland , the annual reports are $300 a year. If the LLC owns additional properties this won't work.

    You could always adjust the price down based on some projections of any possible liabilities.

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  • Tom GimerBusiness Member
    DMV · Member since 2017 · 3k+ posts · 3k+ votes
    5y

    No location provided. You'll want to pull the relevant state law on corporations/LLCs and determine if the surviving members of the LLC have the authority to convey as part of the winding-up process.

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  • Jonathan R McLaughlin
    Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
    5y

    @Carl Millsap best bet is not to make this your problem. If he wants to close before the end of the year he will fix it. I think buying the LLC would prevent any kind of 1031 later too.

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  • Steve Morris
    Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
    5y
    Originally posted by @Jonathan R McLaughlin:

    @Carl Millsap best bet is not to make this your problem. If he wants to close before the end of the year he will fix it. I think buying the LLC would prevent any kind of 1031 later too.

     100%

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  • Carl Millsap
    OP
    Investor · Midwest · Member since 2019 · 339 posts · 226 votes
    5y

    @David Wandel @Tom Gimer @Jonathan R McLaughlin Thanks for the feedback. I appreciate it. 

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