What are the consequences of transferring a home into an LLC in order to rent it?
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What are the consequences of transferring a home into an LLC in order to rent it?
I transferred the deed/title of the home into my LLC, however the mortgage remains in my name (personally). Can a tenant come after me (personally) in the event of a lawsuit, since I am personally paying the mortgage, even though everything else has been transferred to the LLC?
Asked on July 31, 2012 under Real Estate Law, Connecticut
Answers:
MD, Member, California Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
He or she can certainly attempt to sue you when the loan is a personal loan because while the title is in the LLC's name, your issue is that the loan is a personal/residential loan and not a commercial/investment loan. You can try to refinance it into the LLC's name, but you will need to pay for the costs associated with refinancing...see if it is possible with your current lender. Perhaps there may be an easier route for you but again, the issue is not so much who can be sued as much as whether there would be liability (like consider the safety of the home you plan on renting out -- exposed wires, hazards, leaks).
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