Question: How do I transfer land to an Arizona LLC?
Answer: You may have formed a limited liability company to help protect you from things that might go wrong with property you own. For the LLC to protect your personal assets from liability, it must hold the title to the land. To get real estate into a limited liability company, the current owners must sign a deed that conveys the property to the limited liability company and record the deed in the county where the real property is located. If you acquired title to the property in a transaction that went through an escrow company, ask the escrow company if it will prepare the deed. Sometimes the escrow company will prepare the deed for you for no charge or a nominal amount.
Some other issues to consider are:
1. If you transfer the title to the LLC, ask the title insurance company that issued you the title insurance policy on the land to give an endorsement to the title insurance policy as of the date the policy was issued that names the LLC as an additional insured on the title policy. The cost for this type of endorsement is typically $75. If you do not get the endorsement, the LLC will not have title insurance on the land unless it purchases a new policy.
2. Coordinate with the insurance companies that insure the property and arrange to get a new policy or policies of insurance that name the LLC as the insured. Alternatively, you could add the LLC as an additional insured on the existing insurance policy or policies. If you purchased fire insurance that names you as the insured and the home is damaged or destroyed in a fire, the insurance company will probably deny coverage because you are not the owner of the property. Make sure you have written evidence from the insurance company that says the LLC is covered as of the date the real estate is transferred to the LLC.
3. Consult with your insurance agent and make sure that you and your LLC are covered with all appropriate types of insurance that have high amounts of coverage. Examples of such insurance would be home owners and liability insurance, however the types of insurance you need depends in part on the actual business and/or activities of the LLC. An LLC that owns a home leased to a family needs different insurance types and coverages than an LLC that operates an assisted living facility.