Posted by ray@lcorn on August 17, 2003 at 11:23:30:
Earl,
Any discrepancy between the way an insurance policy is written and the actual status of the property, such as who owns it, is a potential problem. Typically no one considers it problem until it comes time to pay a loss. That’s when the documentation of the policy is examined for allowed claims, deductibles, etc., and the worst time to find out there is a problem.
Call your insurance agent Monday morning and inform him or her of the situation. It may be as simple as adding the LLC as additional insured, or even no action.
Take whatever action is recommended (including no action), and document the conversation with a follow-up letter. That memorializes the notification of the insuror in case of any question later.
I have financed my first rental property through my own income and assets. I created an LLC and the deed is in the LLCs name but the mortgage is in my name.
For optimal protection, I would like to have all properties (current and future) and mortgages owned by the LLC. What is the process for making this happen?
Re: Transtion from Personal to LLC Financing - Posted by ray @lcorn
Posted by ray @lcorn on August 14, 2003 at 20:07:26:
Charles,
I’m not sure what protection you’re referring to… if the title and insurance are in the LLC name then liability protection from claims other than from the lender are in place.
As to how to title and finance in the LLC name, if you’re talking about a commercial property most lenders will actually insist that you place the property into a single asset entity, usually an LLC. Expect to sign a personal guarantee for the LLC.
If it’s an SFR, many lenders will only make the loan to an individual, and there is little alternative except to find another lender.
I also have rental properties titled in an LLC to ensure liability protection from claims, but the insurance still is in my name, not the LLCs’. Is that a problem as far as liability protection? Should I be trying to convert the insurance to the LLC’s name also?