Lease Home To LLC
My partner and I are still concerned about an LLC quit claim triggering a DOS for a property in my name...our attorney vectored us toward me "leasing" the house to the LLC circumventing the quit claim altogether. Issues? Probably circumvents the idea of the LLC and liability protection it provides? Insurance in this instance...Personal or LLC? Thoughts?
The LLC will protect your personal assets, but the property is partitionable and subject to liens and encumbrances.You can place your property into a land trust and name your trustee. Then retain 10% interest in the trust in your own name and assign 90% to your LLC. This will keep you in compliance with the DOSC and afford much greater protection. Good luck.
Da Wiz
Q1)- No, the deed is not recorded. It is held in "Escrow" (your filing cabinet) until the contract is fulfilled. For example, if you have a Land Contract with a 3 year balloon, you hold the deed for that 3 years until the property is refinanced. If you structure it like a 30 yr loan, you hold the deed for the entire period until the contract is fulfilled.
Title companies/Lawyers have recommend a memorandum of the contract be recorded for the protection of the buyer. This basically says the buyer has entered into a contract with you that gives him equitable interest in the property. This prevents you from selling it while having under contract with the buyer (and a host of other complications). This however, is not a legal requirement as far as I know.
Q2) If the buyer defaults on a California Land contract, all that is required is an eviction, as in the case of a landlord/tenant.
Q3) People do it all the time. Get a decent downpayment and keep some of that as a buffer should the buyer default. That way you can weather an eviction.[ Edited by Nuetrino on Date 02/28/2006 ]
porcha,
Glad to meet you.
Here is the link to Bill Bronchick www.legalwiz.com
The guy posting this info is mtnwizard he is with the NARS group and you are right he is posting all over.
John $Cash$ Locke
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This post was misrepresented. I did not say that AZ had outlawed subject to or lease options. I never even referred to subject to. I did post this information that was forwarded to me by a friend who is an investor.
He purchased a property subject to, then lease optioned it to a newly married couple. The husband split with another woman and left his wife in the property. She stopped making payments and my friend began eviction proceedings.
His tenant then hired an attorney and my friend went to court fully expecting to win. The judge was the same judge who has written AZ landlord/tenant law, and the five points listed above were taken direct from the transcript of the trial. I just posted this to reflect the current judicial environment re lease options and to give a heads up to investors when using a lease option in AZ.
In this case, she was deemed to have an equitable interest in the property and it cost a small fortune to foreclose, rather than evict.
The problem with 1031 is that the titled owner of the replacement property must be the same as the titled owner of the relinquished property.
Selling property titled in your own name and replacing it with property titled in the name of some other entity is not permitted under a 1031 exchange. Since you would have to transfer title in the replacement property after the exchange closes, you will have a title history with your name on public record. Your cloak of anonymity is pretty sheer.
Personally, I am not worried about anonymity. I am concerned with estate issues, and making sure succession is as simple as painless as possible.
So you agreed to a price escalation addendum and now they want to exercise it?
Your original contract price was $359,000, they want 22k more so that’s $381,000.
Are material and labor costs up nationwide? Yes
You say the same house is selling for $580,000? So if you decide to close you have instant $200,000 equity? On the one hand $200k equity, on the other hand a slim possibility of an additional 10% minus lawyer fees and time but a greater chance of losing because the builder knew enough to put this addendum out there and has probably been through this enough to know what they’re doing.
I don’t know what you should do, but I know what I’d do.
Jim
Since the hurricanes last year, ALL material costs are up. Pay the man.
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