Should an LLC or owners name be listed on a short-term lease contract?

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Should an LLC or owners name be listed on a short-term lease contract?

Christopher J Smith
Member since 2021 · 6 posts · 2 votes

My wife and I jointly own a property used as an STR in Florida under our personal names. We also have a registered LLC/dba in Florida where we own it as a partnership. We are currently looking to allow for renting it out for longer term stays (30+days) through Airbnb/VRBO. My question is... When I go to draft a short term rental lease should I list our personal names as "Landlords" on the lease or can I list our LLC/dba on the lease?  Any advise is very much appreciated. thanks BP community!

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Jason Marino
Attorney · Member since 2022 · 160 posts · 186 votes
3y

Hi Christopher,

I agree with some the information included in the other posts. From a liability perspective, there is a limited advantage to using the LLC as a rental manager. It can help remove some of the contractual liabilities that come with interacting with parties from the property owner, and it is not uncommon to see investors using an Operating Company in this way. Based on that, you can use the LLC as a rental manager. The official way to do this is to create a Property Management Agreement between the owner of the property and the rental manager. This document would give the rental manager the ability to enter into Leases, hire contractors, and do other services on behalf of the owner.

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  • Ryan MoyerBusiness Member
    Property Manager · Orlando Kissimmee Davenport Salt Lake City, Park City · Member since 2019 · 993 posts · 1k+ votes
    3y

    I am the furthest thing from a lawyer, so this is a total guess, but if the home is under your personal name I don't think the LLC is really going to do much of anything to protect you anyway, so I don't think it really matters which you put on the rental agreement.

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  • Christopher J Smith
    OP
    Member since 2021 · 6 posts · 2 votes
    3y

    Thanks Ryan for the info! Do you know by chance if the lease would still be legally binding if I used the LLC versus personal name?

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  • Leslie Anne Morris
    Real Estate Agent · Smoky Mountains, TN · Member since 2022 · 1k+ posts · 984 votes
    3y

    I’m confused. Who owns the property legally? 

    2Reply
  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    3y
    Quote from @Ryan Moyer:

    I am the furthest thing from a lawyer, so this is a total guess, but if the home is under your personal name I don't think the LLC is really going to do much of anything to protect you anyway, so I don't think it really matters which you put on the rental agreement.


     I agree. 

    If things ever went bad an attorney would just look up the owner of the property.

    1Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    3y
    Quote from @Christopher J Smith:

    The lease agreement is between the property owner and the Tenant. If the property is owned in your personal names, that's what you use. If the Deed says the property is owned by "ABC Investments LLC" then that's what you use.


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  • Eliott Elias
    Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    3y

    The landlord is who ever owns the property (your personal names). You can put your LLC as the property manager.

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  • Christopher J Smith
    OP
    Member since 2021 · 6 posts · 2 votes
    3y
    Quote from @Eliott Elias:

    The landlord is who ever owns the property (your personal names). You can put your LLC as the property manager.


     got it, thanks for the advice Elliott!

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  • Christopher J Smith
    OP
    Member since 2021 · 6 posts · 2 votes
    3y
    Quote from @Nathan Gesner:
    Quote from @Christopher J Smith:

    The lease agreement is between the property owner and the Tenant. If the property is owned in your personal names, that's what you use. If the Deed says the property is owned by "ABC Investments LLC" then that's what you use.



     That makes sense, thank you Nathan!

    1Reply
  • Christopher J Smith
    OP
    Member since 2021 · 6 posts · 2 votes
    3y
    Quote from @Leslie Anne Morris:

    I’m confused. Who owns the property legally? 


     Hi Leslie, I own the property with my wife (tenancy in common), our names our listed on the deed.

    0Reply
  • Jason Marino
    Attorney · Member since 2022 · 160 posts · 186 votes
    3y

    Hi Christopher,

    I agree with some the information included in the other posts. From a liability perspective, there is a limited advantage to using the LLC as a rental manager. It can help remove some of the contractual liabilities that come with interacting with parties from the property owner, and it is not uncommon to see investors using an Operating Company in this way. Based on that, you can use the LLC as a rental manager. The official way to do this is to create a Property Management Agreement between the owner of the property and the rental manager. This document would give the rental manager the ability to enter into Leases, hire contractors, and do other services on behalf of the owner.

    4Reply
  • Leslie Anne Morris
    Real Estate Agent · Smoky Mountains, TN · Member since 2022 · 1k+ posts · 984 votes
    3y
    Quote from @Christopher J Smith:
    Quote from @Leslie Anne Morris:

    I’m confused. Who owns the property legally? 


     Hi Leslie, I own the property with my wife (tenancy in common), our names our listed on the deed.


    I'm not following where the LLC is coming into play.

    1Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    3y

    @Christopher J Smith

    Most states require a lease to identify the owner of a leased property, whether a person, trust, LLC, IRA, etc.

    Landlord = Lord of the Land = Owner

    Agent = someone legally representing the owner

    Property Manager = Agent

    Please send us any feedback via email, as we do not use the DM feature here.
    Also, if you like our response, please don’t be shy about giving us a vote😊

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  • Nathan M kiefer
    Rental Property Investor · south carolina and michigan · Member since 2023 · 348 posts · 226 votes
    3y
    Quote from @Christopher J Smith:

    My wife and I jointly own a property used as an STR in Florida under our personal names. We also have a registered LLC/dba in Florida where we own it as a partnership. We are currently looking to allow for renting it out for longer term stays (30+days) through Airbnb/VRBO. My question is... When I go to draft a short term rental lease should I list our personal names as "Landlords" on the lease or can I list our LLC/dba on the lease?  Any advise is very much appreciated. thanks BP community!


    First thing first is you should be using a short term licensing agreement not a lease. Leases in STR's are a invitation for squatters and worse

    nathan

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  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    3y

    Ok, so this is rather confusing. Like @Nathan Gesner said, if it is in your name it should be your names on the lease.

    @Nathan M kiefer, he is talking about doing 30+ day stays which is a long term rental. That means he will need a lease spelling out everything.

    1Reply
  • Nathan M kiefer
    Rental Property Investor · south carolina and michigan · Member since 2023 · 348 posts · 226 votes
    3y
    Quote from @Michael Baum:

    Ok, so this is rather confusing. Like @Nathan Gesner said, if it is in your name it should be your names on the lease.

    @Nathan M kiefer, he is talking about doing 30+ day stays which is a long term rental. That means he will need a lease spelling out everything.


     In my experience it has to follow the zoning and stay. If it's a str district it needs a short term license agreement.

    this will allow them to circumvent the eviction process. If it's a long term rent district ONLY then I agree with you. 

    if you have someone in the house that is staying 30 days for example but they have 25 people there on day 5 then the short term license agreement allows the cops to remove them, if it's a lease it does to the court. 

    i have personally seen this in action.

    I do agree on the lease/license follows the ownership although I would never leave a rental in my personal name.

    nathan

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  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    3y

    Whoa dude. I would love to see a STR only zoning. I have never seen it anywhere in any city. It is either allowed or not or regulated.

    There is no way I would do a 30+ day rental without a lease. Period. Tenants rights convey at that mark just about everywhere.

    There is no STR agreement that works for 30+ day rentals. It doesn't offer any kind of protection.

    I am surprised @Nathan M kiefer 

    0Reply
  • Nathan M kiefer
    Rental Property Investor · south carolina and michigan · Member since 2023 · 348 posts · 226 votes
    3y
    Quote from @Michael Baum:

    Whoa dude. I would love to see a STR only zoning. I have never seen it anywhere in any city. It is either allowed or not or regulated.

    There is no way I would do a 30+ day rental without a lease. Period. Tenants rights convey at that mark just about everywhere.

    There is no STR agreement that works for 30+ day rentals. It doesn't offer any kind of protection.

    I am surprised @Nathan M kiefer 

    Check out ocean lakes sc
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  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    3y

    That is a bad example. Ocean Lakes SC isn't a town, but a private campground located within Myrtle Beach.

    I would have to assume that a campground can set it's own rules regarding tenancy. I couldn't find anything in their bylaws talking about using a home there as a primary residence year round. I did see that there are a bunch of homes that are not rentals. 

    0Reply
  • Nathan M kiefer
    Rental Property Investor · south carolina and michigan · Member since 2023 · 348 posts · 226 votes
    3y
    Quote from @Michael Baum:

    That is a bad example. Ocean Lakes SC isn't a town, but a private campground located within Myrtle Beach.

    I would have to assume that a campground can set it's own rules regarding tenancy. I couldn't find anything in their bylaws talking about using a home there as a primary residence year round. I did see that there are a bunch of homes that are not rentals. 

    I own two beachouses there, just stating there are areas that exist that do str and are zoned for same..

    i wasn't saying it was a town. But it is a 318 acre private resort straight to the ocean with over 300 homes and str zoned 
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  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    3y
    Quote from @Nathan M kiefer:
    Quote from @Michael Baum:

    That is a bad example. Ocean Lakes SC isn't a town, but a private campground located within Myrtle Beach.

    I would have to assume that a campground can set it's own rules regarding tenancy. I couldn't find anything in their bylaws talking about using a home there as a primary residence year round. I did see that there are a bunch of homes that are not rentals. 

    I own two beachouses there, just stating there are areas that exist that do str and are zoned for same..

    i wasn't saying it was a town. But it is a 318 acre private resort straight to the ocean with over 300 homes and str zoned 

    Ok, so the campground is zoned DP which means Destination Park. That means recreational sites for travel trailers and campers.

    Now, how there are permanent structures in a parcel zoned that way I have no idea. Grandfathered in maybe or exceptional use, who knows.

    So, when we are talking about zoning, that is a city and county thing, not a private owner thing. They might have regulations preventing permanent residency, but it isn't zoning. There is a difference.

    Anyways, I think we have derailed this thread enough. Sorry for the thrash @Christopher J Smith.

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  • Nathan M kiefer
    Rental Property Investor · south carolina and michigan · Member since 2023 · 348 posts · 226 votes
    3y

    Lol👍

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