Bank Response To Transfering Title To An LLC
I received a letter from my bank today responding to my question regarding transfering title of my investment property to an LLC.
They said:
"We will not consent to transfer into a partnership of any kind, although you may transfer into a Living Trust. Investor guidelines stipulate that title may not be taken in the name of :
1: a corporation AND/OR
2: an individual on behalf of a corporation or partnership or trust AND/OR
3: a church AND/OR
4: any type of partnership"
Does this mean that since my single member LLC is not considered a partnership (you need 2+ members to be considered a partnership), I can transfer the property into an LLC?
It states that you cannot transfer title to any corporation and an LLC is a limited liability Corporation.
So, no you cannot transfer title without accelerating the loan.
It is better to put it into a Trust with you as the beneficiary. This will give you the same protection without accelerating the loan.
I disagree.
1) LLC stands for Limited Liability Company, not Limited Liability Corporation.
2) I signed for the loan in my name, so I am responsible, not my LLC.
Company....corporation.... still sounds Commercial.
It is your lender who may disagree with you. Ask them what their requirements are for your LLC to obtain a loan to purchase property that will be titled in the name of the LLC.
If the lender says that they will make a consumer loan to your LLC if you personally guarantee the loan, then you may have a beef with your lender. If they, as I surmise, require commercial loans whenever a business entity is a principal, then my response stands.
what if you deed the property into a trust with you as beneficiary, you record this. then you deed the beneficial rights in the trust to your LLC, have it notorized but dont record it. that way the bank will not know. you might be able to record it and they probably still wouldnt know. as long as there getting paid, there shouldnt be a reason for them to call it.
to whom said "just deed it to trust, its the same thing as an LLC" i was under the impression that a land trust doesnt provide liability protection, only confidentiality. an LLC provides liability protection. maybe im wrong.
but what are the tax consequences if you deed to a trust w/llc as the beneficiary? does the llc get the tax benefits of owning the property?