[WSBARP] "Land Trust"?

[Mary L. Stone]

I have had a similar experience where a bank noticed that a client had
conveyed encumbered property into an LLC.  They did not call the loan due
but did require the client to sign a modification of note/DOT and pay a
small modification fee, and also to pay for an endorsement to the lender’s
title policy changing the name of the mortgagor.

 

 

From: wsbarp-owner at lists.wsbarppt.com
[mailto:wsbarp-owner at lists.wsbarppt.com] On Behalf Of Rich Holland
Sent: Wednesday, July 30, 2014 10:48 AM
To: wsbarp at lists.wsbarppt.com
Subject: RE: [WSBARP] "Land Trust"?

 

While many others have spoken to the land trust issue, I just wanted to
chime in and say that I have had a bank contact a client when he put the
property into an LLC.  The action itself wasn’t a trigger – it was months
later.  I believe it was just a random occurrence.  A random audit by the
bank of his file and the bank didn’t ‘call the loan’, they intimated that
they might of course, but the client just quit claimed the property back
out of the LLC.

 

Thank you,

 

Rich Holland

 

From: wsbarp-owner at lists.wsbarppt.com
[mailto:wsbarp-owner at lists.wsbarppt.com] On Behalf Of James Spencer
Sent: Wednesday, July 30, 2014 8:10 AM
To: wsbarp at lists.wsbarppt.com
Subject: [WSBARP] "Land Trust"?

 

Greetings Listmates:

 

I have a client that has “educated” himself on the Interwebs about land
trusts. He is convinced that a land trust is the way to hold his
investment properties, because this guy on the web
<http://www.legalwiz.com/landtrusts/>  says that doing so will make them
judgment proof, the mortgages assumable (without the bank’s consent), etc.

 

I’m trying to advise the client into an LLC for each investment, and if he
seeks privacy, a trust to hold the LLCs. About the only point on which Mr.
LegalWiz.com and I agree is that the transfer to an LLC theoretically can
trigger the mortgage’s due-on-transfer clause, though I have never seen
this happen.

 

I am open to being told that I am not thinking outside the box, and would
love feedback (pros and cons) from all of y’all about the wisdom of
attempting something like a “land trust” in the State of Washington.

 

Thanks!

 

James W. Spencer, Esq.

 

1700 Seventh Avenue, Suite 2100

Seattle, Washington 98101

 

tel: (206) 420-4567 | fax: (206) 257-3076 | www.spectra-law.com

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All opinions and comments in this message represent the views of the
author and do not necessarily have the endorsement of the Washington State
Bar Association nor its officers or agents. 

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Information provided on this list should not be considered legal advice.
As with all lists - let the reader beware! No warranties or
representations are made as to the accuracy of any information provided.
All opinions and comments in this message represent the views of the
author and do not necessarily have the endorsement of the Washington State
Bar Association nor its officers or agents. 

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