Investor · Jefferson City, MO · Member since 2013 · 309 posts · 100 votes
I own a handful of rental properties of which I am currently managing myself. The properties are not within an LLC because they are traditionally financed. I have an LLC set up mainly as an asset protection vehicle. Currently, my LLC is performing manager functions such as showing and renting properties, collecting rent, doing rehabs, ect.... My attorney seems to think that in Missouri, I can't manage my own properties within the LLC because I am not a broker/my LLC is not a brokerage. This seems crazy to me. Does anyone have any experience with this or any suggestions? I really don't want to have to hire a property manager but I also fear managing the properties in my own name vs an LLC.
Sandy, in Mo. your attorney is correct. Not only that, but any court matter such as an eviction you'll need an attorney representing your LLC.
I think too that just having an LLC as a fortress for liability isn't going to work for you being a single member LLC and you doing the management, your best bet is insurance. A property in good condition and good management means you won't be negligent and in Mo. as everywhere else, the law favors landlords over tenants as to their rights.
There is very little liability exposure in showing a property or leasing functions, zip really so long as you act lawfully and if you didn't, the LLC wouldn't matter anyway.
My suggestion is to stay on one side of the fence or the other, not try being on both sides of being in title and management. If the LLC owns the property, that's who should manage it, individually, perform the functions as the owner. :)
Sandy, in Mo. your attorney is correct. Not only that, but any court matter such as an eviction you'll need an attorney representing your LLC.
I think too that just having an LLC as a fortress for liability isn't going to work for you being a single member LLC and you doing the management, your best bet is insurance. A property in good condition and good management means you won't be negligent and in Mo. as everywhere else, the law favors landlords over tenants as to their rights.
There is very little liability exposure in showing a property or leasing functions, zip really so long as you act lawfully and if you didn't, the LLC wouldn't matter anyway.
My suggestion is to stay on one side of the fence or the other, not try being on both sides of being in title and management. If the LLC owns the property, that's who should manage it, individually, perform the functions as the owner. :)
Sandy, it is a gray area. It is very common for someone to have their property owned by an LLC and the LLC (you) manage the rental. Issue that I have heard of but never seen actually happen is if there were a lawsuit for some reason, this arrangement leaves more of a hole for the courts to pierce your LLC.
I'm not an attorney and this is not legal advice, this is just my experience and what I've been lead to believe.