Transfer property from personal to LLC

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    • #4205
      bassadict69
      Participant

      Is it possible to transfer my personally owned (with mortgage) rental property to a newly formed LLC as owner to protect my personal assets in case of any liability?

    • #4216
      Lex
      Keymaster

      Yes, but you have to be careful. Most mortgages have a due-on-sale clause that allows them to foreclose if they did not consent to the change in title. There usually is no problem getting that consent with a provision that you are still personally liable on the loan.

      The transfer would protect you as long as there is no pending litigation and assuming the transfer is not to avoid an existing liability.

      If properly done, a creditor of the LLC would only be able to go after assets belonging to the LLC.

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