I have transferred ownership to an LLC from my personal name using a quitclaim deed. I did receive permission from my lender that this was ok and the due on sale clause would not be enforced. I have read on earlier posts that a warranty deed is the correct way to go about doing this.
Will I be able to sell my property under the LLC? It was stated that the title would be voided. What does this mean? What is the easiest way that I can correct this? Do I have to purchase title insurance for the buyer at closing? Do I transfer it back to my name using a quitclaim and then use a warranty deed to transfer back to the LLC? Thanks.
Your buyers will get their own title insurance. The problem arises when some creditor or heir comes out of no where claiming an ownership interest in the property. That will get expensive for you, prevent you from passing clear title, and your title insurance won’t cover the claim.
The person who set up your LLC should have covered this kind of situation with you and drawn up the proper deeds.
I mean a deed that was appropriate for your situation. I don’t know if a quit claim was the best way for you. I don’t know the best way to integrate the LLC into your estate plan. I don’t know the best way to hold the LLC membership. An LLC outside the context of everything else is a waste of time and money.
I am certainly no expert here but I was under the impression that if you flip-flop property ownership between your self and your LLC, you destroy the liability protection you set out to get by forming the LLC to begin with.
The LLC only offers protection when it owns the assets that produce the liability.
Many people buy in their own name and then transfer to the LLC. There is no basis to ignore the transaction unless the transfer is to defraud, hinder, or delay the payment of a valid debt owed to current or future creditors.
A warranty deed offers a higher level of protection to buyers. Also, warranty deeds seldom stand alone as these documents are usually backed up by a title insurance policy. Instead, a quitclaim deed offers a lower level of protection to buyers. This kind of document is used primarily when the property in question will just stay within a family. If you own the LLC, you may use a quitclaim deed for the transfer.