Posted by Rich-CA on June 18, 2007 at 09:47:56:
My remarks were specific to TX. The County Recorder is not supposed to record a Special Warranty Deed unless the grantor is on Title.
TX investors - Forms for deeding property to LLC - Posted by 105InAZ
Posted by 105InAZ on June 15, 2007 at 13:45:12:
I have a rental in Kendall County, TX that I would like to deed over to an existing LLC that was incorporated in AZ. My first question is whether this is possible, or would I have to create a new LLC in TX. My second question is where would I find (free) forms for this? My preference is not to have to go through an attorney’s office.
Thanks in advance.
TX investors - Forms for deeding property to LLC - Posted by John B. Corey Jr.
Posted by John B. Corey Jr. on June 16, 2007 at 11:28:04:
Spend now or spend later.
There are tax and legal issues when using an out of state LLC.
If you make mistakes in the set up (even if you use a TX LLC) or you
fail to maintain the right degree of control over the LLC you can also
lose.
If you want the property in an LLC for liability protection be prepared
to pay what effectively is the cost of the LLC liability coverage. Like
buying insurance from a good company so when you need it the policy
works as expected.
John Corey
Owner can deed to anyone, but… - Posted by John Merchant
Posted by John Merchant on June 16, 2007 at 08:09:17:
While you can deed to anybody or entity you like, and TX County Clerk (recorder) would have to take it for recording, think about what kind of problem you might be creating when THAT LLC or other grantee gets ready to try to sell.
Let’s assume you deed to A-Z LLC and susequently, A-Z finds a good buyer and wants to sell.
The title co. is then going to want LOTS of info about just who A-Z LLC really is, its legal authority to sell a TX property, who its legal “signers” are, its Operating Agreement, State of TX registered agent if any, corporate resolutions, etc.
So at that time you’re undoubtedly going to have your TX lawyer involved and it could cost you more then than now.
Another thought for you…let’s say you do deed to the OOS LLC, not registered in TX and then somebody claims to have been injured on your property and sues your LLC.
Are you aware that a court in TX might then rule that your OOS LLC was required to legally register and maintain a TX Agent for Service, and if it has failed to do so, might not be permitted to even file a legal Answer to that lawsuit or defend itself in the TX court?
So I’d recommend you spend a few dollars now by hiring a good TX lawyer rather on chancing spending a lot more later on.
Re: Owner can deed to anyone, but… - Posted by Rich-CA
Posted by Rich-CA on June 17, 2007 at 19:40:10:
True enough. Just did this for a property I sold in AZ. They will not only want proof of ownership, they required I transfer the property back into my own name before the sale.
Also, in TX, there is the issue of the Quitclaim deed not meaning much. It legally means the same as, “if I owned an interest, then its your, but if I don’t, then, never mind”. You will need a Special Warranty Deed to convey title that is meaningful.
Special Warranty Deed - Posted by Marc Donovan
Posted by Marc Donovan on June 18, 2007 at 03:31:20:
True enough about the quit-claim deed. But a warranty deed merely adds the ability to sue the former owner and not any more than that. So there is really not a whole lot more that you will get with a warranty deed, especially if the seller has no assets.
A “Special Warranty Deed” only warrants the deed for the time that the seller owned the property and not prior. It has a lesser warranty than a warranty deed.
There is a big misconception that quit-claims are somehow inferior. Not true at all. This is probably due to the example given where I give you a deed to land, but I don’t have legal title. The fact they leave out of that example is that I could also give you a warranty deed to the same land. Only difference being you could then sue me.