Can owners of LLCs manage their own property?

General Landlording & Rental Properties
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Can owners of LLCs manage their own property?

Pablo Prado
Manassas, VA · Member since 2015 · 1 post · 0 votes

Hello,

My wife and have recently formed our LLC for the purpose of getting the liability protection from tenants.

If we do not move the homes' deeds to the LLC, can we still use our LLC to manage (collected rent, maintenance, etc) our rental properties?

Are we still  protected in case the tenants would decide to sue us one day?

Thanks in advance!

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  • Ashley St. Gelais
    Specialist · Essex Junction, VT · Member since 2015 · 279 posts · 67 votes
    11y

    Hey @Pablo Prado,

    My understanding (note: I am not an attorney) is that if someone wants to sue you, they will sue you. And they can name you and the LLC in a lawsuit.

    The purpose of owning a property in an LLC is to create a layer of separation between you and the property.

    You can still use the LLC to manage the property, but I don't believe it would offer the same protection as if the property was owned by the LLC.

    I'd suggest getting an umbrella insurance policy, just in case. (Ours costs a couple hundred $/year.) 

    Is there a reason you are considering not owning the property in an LLC?

    Hope this helps!

    Ashley

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  • Al Williamson
    Rental Property Investor · Sacramento, CA · Member since 2011 · 2k+ posts · 1k+ votes
    11y

    @Pablo Prado I'm not a lawyer either.

    There are plenty of way to pierce the veil of LLCs. You still need to behave with care.

    The structure does help you appear more professional and comes with some significant tax benefits - so it is worth while.

    Once your personal name is in public records as owner of a property, it will always be public. You're not going to fool anyone.

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  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    11y

    If you are personally handling the property and do something found to be negligent an LLC will not prevent you from loosing a lawsuit.

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  • Amanda Davis
    Attorney · Dayton, OH · Member since 2015 · 32 posts · 24 votes
    11y

    If your LLC does not own the property you defeat the purpose of liability protection. If the tenant wants to sue, they would sue the owner of the property, so if the property is in your name, it your personal assets at risk.

    If you keep proper business records and do not comingle business and personal funds, it is not easy to "pierce the corporate veil". Talk to a real estate attorney, and they can help you craft the best plan to protect your assets.

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