[WSBARP] House transfer question

[RebeccaWiess]

As some of my favorite ex parte commissioners liked to say: Disclosure cures
many problems. You have two things going on here, first a transaction which
will be clean on the real estate records and enable eventual clean title
transfer to an innocent third party, which requires no mention of the LLC,
and secondly setting up a defensive shield against any internal causes of
action which would be based on the prior transactions among the four
co-owners. Lay out the history, as you propose, and be sure all four
parties, not just the departing couple are signatories to the deed. For that
reason, I would suggest a deed from all four to the remaining two, rather
than from the departing two to the remaining two.  

 

Rebecca K. Wiess

421 24th Avenue East

Seattle, WA  98112

Phone 206 329-6638

rwiess at foxinternet.net 

 

  _____  

From: wsbarp-bounces at lists.wsbarppt.com
[mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Anthony Gibbs
Sent: Thursday, May 02, 2019 12:56 PM
To: WSBA Real Property Listserv
Subject: [WSBARP] House transfer question

 

I'm hoping for some feedback on the following situation:

 

4 individuals (2 sets of husband & wife) bought a vacation house together,
each contributed significant money for upgrades and furniture, etc. All four
are individually named on the mortgage and the deed.

 

The house was meant to become the sole asset of an LLC formed for the
purpose of holding the property. The LLC was created, but the house was
never transferred to the LLC. Funds for the upgrades came from a bank
account held by the LLC for that purpose and funded by the four indivudals.

 

The 2 sets of H&W do not wish to continue their joint ownership and HW1 have
offered to buy HW2 out of their 50% share of the house.

 

My question(s): since the house was never formally transferred to the LLC,
even though their intent was for the transfer, and the house/mortgage remain
in their four individual names as tenants in common, is the LLC relevant to
the house transaction? In other words, when drafting the transfer agreement
of the house, must the LLC be a named party to the transaction? Could the
LLC issue be handled in the recitals beginning the transfer agreement,
something like: "Funds from the LLC were contributed by the four individuals
named and the parties agree that any itemized money transfers between the
individuals are in reconciliation of contributions to and payments from the
LLC."

 

In a nutshell, I'm trying to anticipate how a schemer might try to come back
and unwind the transaction on the grounds that the LLC (which was not
properly governed and could be pierced) was not properly addressed.

 

Sorry about the long-windedness but I'd appreciate any thoughts on the topic
or, perhaps, even a couple minutes of phone time.

 

Cheers,

Anthony



-- 

Anthony F. Gibbs | Attorney

The Moceri Law Group PLLC

(888) 510-1961

 

anthony at mocerilaw.com

 <http://www.mocerilaw.com/> www.mocerilaw.com

 

1310 North I Street, Suite B

Tacoma, WA 98403-2139

 

15600 Redmond Way, Suite 101

Redmond, WA 98052

 

Disclaimer: If you received this email in error, please throw it in the
trash and let me know. Thanks.

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