Real Estate Agent · Tustin, CA · Member since 2015 · 2 posts · 0 votes
For markets where STR permits are no longer being issued, and the permits are non-transferable - has anyone successfully used an LLC to sell the property without making the STR permit invalid?
For STR permits, there are 2 names listed 1) the owner 2) the local representative/property manager. The PM can be changed at any time, but a change in ownership of the property makes the STR permit invalid.
My understanding is that (theoretically) you can put the property into an LLC, register the STR permit to the LLC, and then sell the LLC with the property in it, and because there is technically no change in ownership of the property (aka the LLC changes hands, but as far as the STR permit goes, it's still owned by the same entity), you can continue to renew the STR permit.
But I don't know of anyone who has actually done this... wondering if anyone in the community has, or knows someone who has?
Have you asked the municipality? Should be able to get an answer from them. My guess is that they will say no. Technically the LLC is a new entity, even if you have control of that LLC.
Have you asked the municipality? Should be able to get an answer from them. My guess is that they will say no. Technically the LLC is a new entity, even if you have control of that LLC.
@Luke Carl@Michael Baum my experience with the cities is that the people in the STR permit offices don't really know all that much about what's going on...
And Michael - just so I understand your comment about the LLC being a new entity... I'm not referring to the permit transferring with the property when I put it into the LLC. I'm referring to the permit going with the property when the LLC changes hands. Because the property will be owned by the same entity (the LLC) before AND after the sale.
Hey @Tyler Mounce what I saw is the you want to take a personally owned property with a valid STR permit. Then move it to an LLC with the permit intact. I made the assumption that you owned a property personally with the permit in your name.
If you moved that property into the LLC, but the permit was in your name, I think it is possible to be OK if you are the one running the show. You can show that it might be in the LLC, but you are the owner of the property and permit.
If you sell the property, I don't believe that the permit can transfer and still be valid.
I also don't think you can move the permit to the LLC after the fact without it be invalidated. If the property was in an LLC and you got the permit in the name of the LLC, you might be able to sell the property with the permit intact seeing that the entity that runs the property is the same. I am no expert on this.
You will have to go up the food chain to get your answer if the STR folks at the desk can't help you.
Hey BP folks, looking for some suggestions on best smart lock and security system (w/ cameras) for a new STR. I'll be self managing from afar so need remote programming capabilities for both. After some limited research I've been overwhelmed by the number of options so I'm looking for advice based on previous experience. TIA!