Legal Question in Real Estate Law in New York

Re: Undoing an LLC

I agree with Kevin that a simple Deed to retransfer should be all that is required. If you do this, you also need to terminate the LLC, unless you have other needs for it. However, as he suggests, before you do this, it might be wise to discuss what you were trying to accomplish by using the LLC in the first instance. While it may be burdonsome to change insurance, utilities, etc., what you have done is not unusual and may still be valid. Yes, many bank mortgages have clauses that state if there is a change of ownership (the transfer to the LLC is considered a sale), they can call the mortgage, but they might not as long as you agree to still guaranty and pay the mortgage. Most banks will allow the transfer, if you are a principal in the LLC. This will require an analysis of the LLC documents, notifying the bank, getting their approval and, probably, signing some additional documents. If your intent is to rent the property, rather than use it as a personal vacation home, they might want to adjust the interest rate, as renting it converts it to a commercial undertaking, not personal, private use, and most banks would charge a different rate for a commercial loan. I do not know why the original attorney did not review these matters with you. If you want to discuss this with me before doing anything further, contact me directly.

Re: Undoing an LLC

It's hard to give you real advice without knowing why the property was transferred to an LLC in the first place. The simple solution is to have the LLC deed the property back to you for no consideration. However, you might want to spend an hour or so with an attorney to make sure the angles are all covered.

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