Leases in LLC but not title

2 Replies

There's a lot more to Asset Protection than having your leases in the name of the LLC.

You can Quitclaim your property to the LLC which involves transferring the Title, but that's only part of the larger picture. First of all, there's the issue of the possibility of the lender calling the loan if they learn you've violated the transfer clause, which you will avoid if your name (and assuming your wife) on the loan is the same as the member(s) of the LLC; you and your wife. Also, an LLC needs to be managed appropriately in order to keep from "piercing the veil" which may involve you being held personally liable by a court. Rather than detailing what's already been discussed extensively here on BP, I suggest you research Asset Protection using the search option, but I'll address the Title issue.

If you choose to Quitclaim then you’ll want to check with the Title Company regarding the Title insurance to see if the coverage remains intact if the asset is transferred. Generally, the coverage of the policy will state; “The coverage of this policy shall continue in force as of Date of Policy in favor of an Insured after acquisition of the Title by an Insured or after conveyance by an Insured, but only so long as the Insured retains an estate or interest in the Land, or holds an obligation secured by a purchase money Mortgage given by a purchaser from the Insured, or only so long as the Insured shall have liability by reason of warranties in any transfer or conveyance of the Title.”

Each asset in my portfolio is in its separate LLC. Some states offer Series LLC but my state doesn't. Each asset has been QC to the respective LLC (Title confirmed insurance remains) and each has its separate bank account, lease contract, files separate taxes, insurance is in the LLC name with me as additionally insured, county taxes are in the name of the LLC, etc. Nothing is in my name and I never mix personal funds with the LLC.

No.  The owner is ultimately responsible....in the case of a liability, both the the management company and the owner get sued.  Even if the management company is “first in line”, the owner will be liable for anything the management company can’t pay.