Legal Question in Real Estate Law in Arizona

My husband is signed for a mortgage on a home that was actually purchased by his LLC. The mortgage was put only in his name (through pressure and situation... though he wishes he didn't do this).

Now, we have 2 members that have dropped out of the LLC, we can't refinance because of the market, and we are having trouble keeping the house rented out. Because of this the money in the LLC is short to make the payments (last month was $1400 short). Not all of the members have the money to put extra in and so because it would affect his credit, we are stuck with the extra money to pay and throw away. The only one that will be hurt if there's a foreclosure or something like that is my husband.

Is there a way to get the mortgage transferred to the LLC's name? or Do you have any suggestions on how we can get out of this situation? What are our options?

Thank you very much for your time and information.


Asked on 9/15/10, 9:05 am

1 Answer from Attorneys
Donald Scher Donald T. Scher & Associates, P.C.

The situation you describe is difficult and the answers depend upon what rights and duties your husband has individually and as a member of an LLC. You do not state how many members of the LLC are remaining or if your husband is the managing member, however, in any case, no lender will agree to transfer the loan and liability to the LLC under the circumstances you describe. Your husband will have a claim against the LLC and possibly, against the other members of the LLC. I could not give you suggestions about your options or what you can do to minimize the liabilities involved, without much more information. It is clear that you need to retain legal counsel immediately and get an analysis of the facts involved, so that you can sort out your options and understand your duties and obligations arising out of this situation.

Read more
Answered on 9/20/10, 9:46 am


Related Questions & Answers

More Real Estate and Real Property questions and answers in Arizona