Updated 2 months ago on . Most recent reply
LLC & Revocable living Trust
I have a question regarding a rental property owned by a single member LLC. The LLC holds a commercial mortgage that includes a due on sale clause. There is no operating agreement in place, and just the sole manager and 1 member.
Considering transferring ownership of the LLC itself (not the property) into revocable living trust. There will be no change in management, no new members added, and no amendments made to the LLC structure just a transfer of membership interest from personal to trust, where serves as trustee.
Would this transfer of the LLC into the Trust trigger the due on sale clause under the commercial loan terms?
Most Popular Reply
#2 Private Lending & Conventional Mortgage Advice Contributor
- Lender
- 1,441
- Votes |
- 4,716
- Posts
#2 Private Lending & Conventional Mortgage Advice Contributor
- Lender
Is this a 1-4 Unit property? If it's on a DSCR loan, it may be challenging to trigger this clause unless you are changing title to someone else's name or paying off the loan early.
Have you tried checking with the loan servicer?
- Erik Estrada
- [email protected]
- 818-269-7983
