Posted on: 02nd Aug, 2007 07:18 pm
I have recently purchased rental property with the loan and property in my name. I now want to transfer to my LLC for liabilty protection (nothing has happened, but you never know), which is the best, a quit claim, or a warranty deed subject to the deed of trust
Hi RdbII,
Nowadays, many people opt to transfer their property to the LLC (Limited Liability Company) to protect them from any liability. You can also transfer your rental property to the LLC. And a quitclaim deed would be best for this purpose. You would be able to free yourself of liability by executing this deed.
Whereas a warranty deed creates the liability as it guarantees or warrants the person who is the legal owner of the property prior to the transfer. You don't get such a guarantee with the quit claim.
Nowadays, many people opt to transfer their property to the LLC (Limited Liability Company) to protect them from any liability. You can also transfer your rental property to the LLC. And a quitclaim deed would be best for this purpose. You would be able to free yourself of liability by executing this deed.
Whereas a warranty deed creates the liability as it guarantees or warrants the person who is the legal owner of the property prior to the transfer. You don't get such a guarantee with the quit claim.
Hi Rdb,
Welcome to the forums.
You can transfer your property to the LLC. But this will not transfer your loan (deed of trust as you've mentioned above). In case of default, you'll have to pay off the loan or else the lender or the mortgage company may demand the payment from the LLC. Still, if you wish to transfer the property, it can be done through a quitclaim deed.
Take Care
Welcome to the forums.
You can transfer your property to the LLC. But this will not transfer your loan (deed of trust as you've mentioned above). In case of default, you'll have to pay off the loan or else the lender or the mortgage company may demand the payment from the LLC. Still, if you wish to transfer the property, it can be done through a quitclaim deed.
Take Care
Before you move ahead with plans of transferring property into LLC I would suggest that you contact the loan company and inform them about your decision.
What (if any) are the potential negative consequnces of notifying your lender of your plan?
If you don't inform the lender, who knows he may call the loan due just in case there's an acceleration clause on the mortgage note.
To answer your question: quitclaim deed.
