Can an LLC bring suit to recover unpaid property taxes that pre-date the LLC?

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Can an LLC bring suit to recover unpaid property taxes that pre-date the LLC?

Father died in 2005. Surviving spouse had life estate in the (unencumbered) homestead, but did not pay taxes for 4 years. To protect our interests my brother and I, as remaindermen, have paid 2 years’ back taxes and successfully sued the surviving spouse in small claims court. She has now quitclaimed the property to us and we intend to put it into an LLC as a rental property. Can the LLC pay the remaining back taxes and sue to recover, or must my brother and I pay and sue as individuals (co-plainitiffs) since the tax liability pre-dates the quit claim and LLC formation?

Asked on January 20, 2011 under Business Law, Florida

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

The answer here is: it depends.  How are you or your attorney drawing up the LLC and the purchase agreement?  Will the LLC assume all the rights and liabilities of you are the remaindermen to the property not have at this point in time?  If the answer is "yes" then you should have no problem suing in the name of the LLC.  But you really need to discus the best legal way for you to do all of this.  I am assuming that you wish to place the property in the ownership of the LLC to protect yourself from personal liability from potential claims in the operation of the rental business. This way if you are sued then the liability is limited to the assets of the LLC.  Please make sure that you have sufficient insurance on the property. But you need to discuss all of this with an attorney in your area.  Good luck. 


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