How do I Transfer a Title of Property From a Person to an LLC?

By Christine Funk, J.D.

How do I Transfer a Title of Property From a Person to an LLC?

By Christine Funk, J.D.

Someone who has several real estate investments, such as rental properties or commercial properties, may consider forming a limited liability company (LLC). Once that has formed, title to the investment properties can transfer to the business, limiting the personal liability the owner could otherwise face if an injury occurred on a rental property.

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To transfer real estate title from an individual to an LLC, take the following steps.

1. Create an LLC.

Creating an LLC is the first step toward transferring real estate titles. You must:

  • Choose a name
  • Choose a registered agent
  • Create an operating agreement
  • File the relevant paperwork with the state

Once you've established this information, you can continue toward your goal of transferring over the title of any real estate.

2. Contact the mortgage lender.

If the property has a mortgage, that mortgage came with certain conditions. Mortgages often include a due on sale clause, which requires the full payment of the mortgage amount at the time of any sale. Talk to your lender to explore your options. These options may include permission to transfer the property and continue with the mortgage as it currently stands or refinancing the mortgage. If you refinance the mortgage, list the LLC and not yourself as the borrower. You can expect the mortgage company to require you to guarantee the mortgage personally if your business does not have an established credit history and steady income of its own.

3. Locate the current deed.

As the owner, you may have received the deed at the time of purchase of the property. If you need a copy, contact the county recorder's office in the county where the real estate is located.

4. Select the correct deed transfer device.

Whether you choose a warranty deed or a quitclaim deed is a personal preference. Both have legal consequences. With a warranty deed, the seller warrants the home is free from legal issues such as a lien on the property or an undisclosed easement. A quitclaim deed, on the other hand, does not guarantee the title is correct, nor does it always address all other issues relating to the property. A quitclaim deed is often used in this circumstance.

5. Obtain the deed transfer form.

Different states have different requirements for the language used in deed transfers. Consequently, it is a good idea to inquire as to the required format for a deed transfer form.

6. Complete the deed transfer form.

Fill out the deed transfer form in its entirety with the exception of the signature line.

  • Fill in the date
  • Identify the grantor (the person who owns the property), listing their name as it appears on the current deed
  • List the grantor's address
  • Identify the grantee (in this case, the LLC), listing the company's name exactly as it appears on the articles of organization filed with the state
  • Identify the amount of consideration, or the amount of money the LLC is paying to purchase the real estateā€”if no money is being exchanged, contact the county recorder's office to inquire how to proceed
  • Copy the legal description (the boundaries and dimensions of the property) exactly as it appears on the current deed

7. Have the signatures notarized.

The signatures require notarization, so don't sign the document until you are before a notary. Once in front of a notary, the grantor signs and dates the document.

8. File the necessary paperwork and pay the fee.

At a minimum, you have to file the deed with the county recorder's office. In some jurisdictions, you also have to file other paperwork when you transfer a deed. Expect to pay a filing fee to record your deed.

Once an LLC has been formed, real estate titles may be transferred. After properly following all the steps to transfer title, an owner can rest assured that their personal liability from a property has been limited.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.