Real Estate Agent · Louisville, KY · Member since 2016 · 147 posts · 135 votes
This may be a dumb question but, if we are doing a Quitclaim Deed to transfer ownership of a property over to an LLC, should we also change the insurance policy from our personal names to the LLC name?
Real Estate Agent · Virginia Beach, VA · Member since 2012 · 2k+ posts · 1k+ votes
9y
If you have a mortgage on this property, search these forums for due on sale clause or LLC vs umbrella, or just insurance LLC. Lots of good advice on older threads. My take is if it's owned free and clear, transferring to an LLC and changing the insurance can be a good tool to protect yourself, but it can trigger transfer taxes if applicable, and in some states that can be expensive. If there is a mortgage in your name, once you switch the insurance to the LLC, your mortgage company will likely be notified by them of the change in ownership, which may trigger your due on sale clause.
Lansing, MI · Member since 2015 · 301 posts · 149 votes
9y
@Brad Noe - You should change the name to the LLC. This keeps the property separate from you personally. Which is the point of the LLC to begin with right? Also, there is potential your current company will want to switch the policy into a commercial policy from a personal one due to it being in an LLC name now.
Real Estate Agent · Virginia Beach, VA · Member since 2012 · 2k+ posts · 1k+ votes
9y
If you have a mortgage on this property, search these forums for due on sale clause or LLC vs umbrella, or just insurance LLC. Lots of good advice on older threads. My take is if it's owned free and clear, transferring to an LLC and changing the insurance can be a good tool to protect yourself, but it can trigger transfer taxes if applicable, and in some states that can be expensive. If there is a mortgage in your name, once you switch the insurance to the LLC, your mortgage company will likely be notified by them of the change in ownership, which may trigger your due on sale clause.
Real Estate Agent · Louisville, KY · Member since 2016 · 147 posts · 135 votes
9y
@Tim Puffer that was my assumption as well, just wanted to make sure. Thank you for the advice.
@Lynn McGeein Thanks for the response. I have a mortgage on the property and have approval in writing from the lender to quitclaim the deed to the LLC.
Investor/Landlord · Farmington Hills, MI · Member since 2011 · 1k+ posts · 1k+ votes
9y
If the ownership changes and you do not change the owner on the insurance policy the insurance company may refuse to pay a claim. Speak with your insurance agent.
Real Estate Investor · Louisville, KY · Member since 2014 · 2 posts · 1 vote
9y
@Brad Noe Do you mind sharing which lender you are using? I am in the Louisville area as well and would like to find a lender where I don't have to worry about a due on sale clause.
Rental Property Investor · Stewartsville, NJ · Member since 2016 · 419 posts · 280 votes
9y
Is there any advantage to having 2 LLCs instead of just 1 when owning property, and one of them being a Wyoming or Nevada LLC?
For example one LLC that holds title to the property in the state that the property is in, and that LLC has 1 managing member (which itself is a Wyoming or Nevada LLC that you are a member of)?
From looking around the interwebs, it seems that this may help protect the LLC further with charging orders.
Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes
9y
There are some benefits to having 2 LLCs in series with one being a parent company and the other being a wholly owned subsidiary. You need to get good legal advice on doing this and it may vary from state to state on what works best. You can do disregarded entity for taxes.