Full question:
We Purchased investment property in both husband/wife names(sales price $47,500); Deed was recorded on 3/7/11; We want to transfer property to our LLC , which is also in husband/wife names; it is a Special Warranty Deed which reads: 'GRANTEE HEREIN SHALL BE PROHIBITED FROM CONVEYING CAPTIONED PROPERTY TO A BONFIRE PURCHASER FOR VALUE FOR A SALES PRICE OF GREATER THAN $57,300 FOR A PERIOD OF THREE MONTHS FROM THE DATE OF THIS DEED. GRANTEE SHALL ALSO BE PROHIBITED FROM ENCUMBERING SUBJECT PROPERTY WITH A SECURITY INTEREST IN THE PRINCIPAL AMOUNT OF GREATER THAN $57,300 FOR A PERIOD OF THREE MONTHS FROM THE DATE OF THIS DEED. THESE RESTRICTIONS SHALL RUN WITH THE LAND AND ARE NOT PERSONAL TO GRANTEE. THIS RESTRICTION SHALL TERMINATE IMMEDIATELY UPON CONVEYANCE AT ANY FORECLOSURE SALE RELATED TO A MORTGAGE OR DEED OF TRUST' Since we are not selling the property; can we Quit Claim it to our LLC prior to the three month period?? If the Quit Claim is 'legal' to do immediately, can you handle this for a fee; can we personally do this; would this cause potential issues explaining that the property was not sold?
- Category: Real Property
- Subcategory: Sales
- Date:
- State: Tennessee
Answer:
Generally, a deed that transfers real property for value is considered a sale, even if the consideration is only one dollar. According to the language you provided, the deed restriction does not prevent a transfer to an LLC as long as the purchase price is $57,300 or less.
A deed is a written document that transfers title or an interest in real property. It must describe the property, name the grantor (the person transferring the property), and the grantee (the person receiving the property). The grantor must sign and notarize the deed. Additionally, deeds must be acknowledged to be recorded and accepted as proof of ownership. A valid deed must be delivered and accepted to effectuate the transfer. Most states assume delivery if the grantee is in possession of the deed, and acceptance can be shown through actions indicating intent to accept, like recording the deed.
There are two basic types of deeds: a warranty deed, which guarantees that the grantor owns the title, and a quitclaim deed, which transfers only the interest the grantor actually has. A quitclaim deed contains no warranties, meaning the seller is not liable for any claims on the property. The purchaser takes the property subject to existing taxes, assessments, liens, encumbrances, and other recorded issues. However, if a mortgage exists, the person who obtains a mortgage is still liable for payments after executing a quitclaim deed on the property securing the mortgage.
In conclusion, you can likely quitclaim the property to your LLC before the three-month period, as you are not selling it. However, it is advisable to consult with a legal professional to ensure compliance with any specific state laws and to address any potential issues.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.