Tenant want to change change his name into his new LLC.

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Tenant want to change change his name into his new LLC.

Bryan Ju
Blue Island, IL · Member since 2017 · 10 posts · 0 votes

Hello BP family! I have a great tenant for 3 years now and got a call from her asking me to change our lease agreement into his new LLC .WE just renew out contract 2 months ago for another year. How do you handle situation like this? Thanks in advance.

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Renee Harris
Real Estate Agent · Los Angeles, CA · Member since 2015 · 218 posts · 111 votes
4y

"I'm not renting to your LLC honey, I'm renting to you."

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  • Max T.
    Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes
    4y

    I say, "nerp, sorry!"

    2Reply
  • Renee Harris
    Real Estate Agent · Los Angeles, CA · Member since 2015 · 218 posts · 111 votes
    4y

    "I'm not renting to your LLC honey, I'm renting to you."

    3Reply
  • Bjorn AhlbladPro Member
    Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
    4y

    Yes you can do that at your next place. 

    1Reply
  • Adam Martin
    Rental Property Investor · Member since 2020 · 1k+ posts · 1k+ votes
    4y

    They want to rent under a llc to protect their assets in case there is a claim against them, that is not in your best interest and not something I would like to do.  I am curious why they asked for this and is there a business being ran inside the unit or if they are using an arbitrage strategy to lease from you and re-rent short term or furnished and pocketing the difference.  It would make sense they would want to use an llc to protect them but this leaves you exposed.  This seems like a strange request if it was just to a family.  I wouldn't change your current lease and next year on renewal would say no again.  

    2Reply
  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    4y

    You are renting to her.  IF she has a business, is she operating that out of the rental? If so, that is a bigger problem.

    1Reply
  • Scott M.
    Real Estate Broker · Rochester Hills, MI · Member since 2009 · 2k+ posts · 2k+ votes
    4y

    I would talk to your real estate attorney first to see how this would enhance or damper your ability to evict. Or you can simply say no thank you, I only rent to individuals not LLC's. LLC's are not a protected class.

    0Reply
  • Wade Suhr
    Tomah, WI · Member since 2020 · 13 posts · 7 votes
    4y

    Can someone explain how a tenant leasing a rental as an LLC possibly protects anything? Did the tenant explain the reasoning for this? I ask because I can't think of a benefit to the tenant due to lack of my experience.

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  • Bill Crow
    Investor · Lewisville, TX · Member since 2012 · 106 posts · 103 votes
    4y

    @Wade Suhr

    That’s a really good question. I would be curious as to the tenant’s motivation.

    I can’t think of any benefit for the landlord to do this. It’s possible the tenant thinks they can write off the rent as a business expense, which it’s highly unlikely they could do legally. Does your lease allow tenants to operate a business from the residence? There are a number of little things that could get screwy with the lease being in any name other than the residents. Why add to your landlording risk?

    Regardless of the motivation, I agree with the other responders - I would decline to do it.

    1Reply
  • Josue Vargas
    Real Estate Agent · San Antonio, TX · Member since 2017 · 814 posts · 466 votes
    4y

    First, is your property intended to family rental?  

    If its for family, look at your lease/contract.  I'm not a lawyer, but it should be pretty clear your rental is intended only for family use, no business.  Now if you have a commercial space, that's a different story. 

    I would rent to an LLC, if its possible, also it means a new contract and at a commercial property rate. If you intend your property to be filled with family, stay away from this.

    If you decide to rent to an LLC, know the state/city requirements before doing this. I recommend talking to an attorney.

    3Reply
  • Josue Vargas
    Real Estate Agent · San Antonio, TX · Member since 2017 · 814 posts · 466 votes
    4y

    @Wade Suhr

    Taxes.  Most of the time people with very small business like landscape or whatever wants to write off expenses against their business, for tax benefits.  Think about all the industry small service/construction.  Landscapers, nanny, cleaning pools, the handyman guy, housekeeping, the food truck, the guy who comes to my house to teach my son's classes of drums or guitar ... LLCs is very common.  Anyone with a US passport or SSC can have one.  Now think about that for a moment... 

    0Reply
  • Bryan Ju
    OP
    Blue Island, IL · Member since 2017 · 10 posts · 0 votes
    4y

    Thanks for all the replies! I will definitely say No. he said for tax purposes.

    0Reply
  • Andrea HardawayPro Member
    Chattanooga, TN · Member since 2014 · 26 posts · 28 votes
    4y

    Is this a commercial rental or a residential property?

    0Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    4y

    If it's a residential rental, it should be in a personal name and they shouldn't be operating a business from the residence. I would deny the request. 

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