Can LLC Manage Property (by Sandra [MO]) May 6, 2015 8:39 PM
Can LLC Manage Property (by john [NY]) May 6, 2015 9:19 PM
Can LLC Manage Property (by Colin [CO]) May 7, 2015 1:11 AM
Can LLC Manage Property (by Sandy [MO]) May 7, 2015 3:08 AM
Can LLC Manage Property (by Dan [MA]) May 7, 2015 3:53 AM
Can LLC Manage Property (by frank [NY]) May 7, 2015 5:44 AM
Can LLC Manage Property (by John... [MI]) May 7, 2015 7:25 AM
Can LLC Manage Property (by Vee [OH]) May 7, 2015 8:08 AM
Can LLC Manage Property (by Blue [IL]) May 8, 2015 3:06 AM
Can LLC Manage Property (by John... [MI]) May 8, 2015 8:04 AM
Can LLC Manage Property (by #22 [MO]) May 9, 2015 4:09 AM
Can LLC Manage Property (by John... [MI]) May 9, 2015 6:11 PM
Can LLC Manage Property (by John... [MI]) May 9, 2015 6:20 PM
Can LLC Manage Property (by razorback_tim [AR]) May 10, 2015 4:12 PM
Can LLC Manage Property (by Sandra [MO]) Posted on: May 6, 2015 8:39 PM Message:
State Specific Question About: MISSOURI (MO)
I currently have an LLC created for my rental properties. The properties are not currently in an LLC because they have traditional financing that prevents this. I recently took over landlord responsibilities for my SFHs. My attorney is now telling me that in Missouri, you have to have a brokers license in order to manage properties unless you manage them under your own name. In other words, my LLC (even though it is owned only by me and my husband) cannot legally manage my properties.
This doesn't seem right to me. The main reason I created an LLC was for asset protection. Any thoughts? --71.0.xxx.xxx |
Can LLC Manage Property (by john [NY]) Posted on: May 6, 2015 9:19 PM Message:
IS this rule even enforced? Its been the law in NY for a long time, and I've never had a brokers license. Some of the city rental registration forms ask if I'm a realtor, and I say no, but I have not had them try to enforce the rule, so I ignore it. --74.106.xx.x |
Can LLC Manage Property (by Colin [CO]) Posted on: May 7, 2015 1:11 AM Message:
Set up a DBA --73.181.xxx.xx |
Can LLC Manage Property (by Sandy [MO]) Posted on: May 7, 2015 3:08 AM Message:
While it is rarely enforced, my concern is that if a tenant brings a lawsuit against my LLC, their attorney could then argue that I was managing without a license AND they could at that time sue me personally. Thoughts? --71.0.xxx.xxx |
Can LLC Manage Property (by Dan [MA]) Posted on: May 7, 2015 3:53 AM Message:
If you and your husband are hands on managing the properties, there is very little an LLC is going to do to protect you and your assets. Regardless of whether the properties are owned inside the LLC or if the LLC is just managing, you will be sued personally as the person who did the work which caused the lawsuit.
An LLC proves useful when the properties are held inside (away from your personal assets) and they are managed by a third party who is not you. --64.197.xx.xx |
Can LLC Manage Property (by frank [NY]) Posted on: May 7, 2015 5:44 AM Message:
In NY, if you have an interest (percentage) in real property with or without a LLC, you are NOT required to have a broker's licence.
Yes, if you manage the properties under the LLC, you still can get sued. However, it is harder for the courts to force you to liquidate or redirect proceeds when the LLC is done correctly.
If you have only one property/LLC, the benefits seems few. When you have multiple, then each is materially separate and should be very hard to take the non-involved from you.
On another note, I wouldn't get a brokers' licence. My broker friend says that each time she talks to a potential tenant for her properties she has to disclose that she is a broker and her licence is still at risk even if she is not acting as a broker.
If you are managing someone else's properties then the law applies to you. Maybe an attorney can defend if you had a 2% interest in the property. --100.2.xxx.xxx |
Can LLC Manage Property (by John... [MI]) Posted on: May 7, 2015 7:25 AM Message:
Whether or not an LLC CAN do it really doesn't matter here -- because the main issue is what Dan said. Your LLCs, in my opinion, have pretty much NO ASSET PROTECTION like you think they provide.
LLCs were created to protect NON-MANAGING MEMBERS only. You are a managing member of the LLC. It does not provide any real protection for you.
Get rid of the LLC and have a decent umbrella policy. Problem solved.
- John...
--207.241.xxx.xxx |
Can LLC Manage Property (by Vee [OH]) Posted on: May 7, 2015 8:08 AM Message:
Asset protection - boost insurance, drop LLC. --75.94.xxx.xxx |
Can LLC Manage Property (by Blue [IL]) Posted on: May 8, 2015 3:06 AM Message:
How in the world would they know? --66.87.xx.xx |
Can LLC Manage Property (by John... [MI]) Posted on: May 8, 2015 8:04 AM Message:
Blue: They "know" when you go to do anything with the courts -- filing for eviction, for example -- and a pro-tenant with their free attorney points out that you have no legal right to file an eviction on behalf of the LLC because you don't have a legal right to manage the property...
Sometimes, yes, you can go "Well, no one will ever no, so no big deal" -- but, in this case, if it is accurate what the attorney told them, then it IS a "big deal" to just ignore that. Because doing the normal stuff is easy -- but doing the more complex/legal stuff will get you into some real trouble.
- John...
--207.241.xxx.xxx |
Can LLC Manage Property (by #22 [MO]) Posted on: May 9, 2015 4:09 AM Message:
John,
a big umbrella policy always makes sense - this is a good tip.
Can you tell me where there's case law in Missouri, proving llcs, as you describe, as having no asset protection? --108.218.xxx.xxx |
Can LLC Manage Property (by John... [MI]) Posted on: May 9, 2015 6:11 PM Message:
No -- because proving a negative is generally difficult. :)
Can you show me any cases where an LLC PROVIDED asset protection for a managing member of the LLC? Unless the lawyer was completely incompetent, negligent managing members are generally not considered protected by the LLC. Again, they were never even DESIGNED with that in mind.
There are a couple states that are exceptions to that rule because, over the years, additional laws have been written to include LLCs as something more like other legal entities. But, in most cases, LLCs simply aren't designed for asset protection (of managing members).
- John...
--97.91.xx.x |
Can LLC Manage Property (by John... [MI]) Posted on: May 9, 2015 6:20 PM Message:
A quick search finds this at NOLO discussing Missouri LLCs: [from www.nolo.com/legal-encyclopedia/llc-protection-members-personal-debt-missouri.html ]
---
Charging orders can be obtained in Missouri to collect on a judgment obtained by a personal creditor of a member. However, creditors of Missouri LLCs are not limited to this method of collecting. Unlike many states, Missouri LLC law does not provide that a charging order is the exclusive remedy of members’ personal creditors. Thus, in addition to obtaining a charging order, creditors may be able to foreclose on the debtor-member’s interest. If this occurs, the creditor becomes the permanent owner of all the debtor-member’s financial rights, including the right to receive money from the LLC. Moreover, the creditor might even be able get a court to order the LLC dissolved and its assets sold to pay the creditor’s judgment.
This makes Missouri one of the least attractive states in which to form an LLC as far as protection from personal creditors goes.
---
I thought it was interesting that it basically said that MO was one of the worst states to expect LLCs to provide protection in that case.
Of course, some argue that just the LLC would be held responsible -- that's the general idea of why people do this. But, in reality, most would sue BOTH the LLC and the member that was negligent personally. The LLC might provide a very limited "misdirection" as to who the person is -- but any decent lawyer would eventually find out and, again, sue both the LLC and the person involved.
If they WON against the person then, as mentioned above, the LLC's assets (including, apparently, forcing foreclosure) COULD be included in what is used to pay the personal debt.
- John...
--97.91.xx.x |
Can LLC Manage Property (by razorback_tim [AR]) Posted on: May 10, 2015 4:12 PM Message:
Back to the original question of whether LLC's can manage property...
I would recommend that you review the Missouri statutes for yourself regarding this matter. You can find the section that deals with this particular question at www.moga.mo.gov/mostatutes/stathtml/33900000101.html
Keep in mind that I'm not an attorney but I would interpret the statutes to say that your LLC cannot manage the properties if they are owned by you personally but could only do so if the properties are owned by the LLC. The key phrase in the statutes seems to me to be "for others." --70.178.x.xx |
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