Updated: Jul 13, 2022
Just about every week, a business owner asks us about transferring real estate to an LLC. The typical reason is to protect the personal assets of the
1. In Pennsylvania, the transfer will trigger realty transfer tax. That’s no less than 2% of the fair market value of the property. In Pittsburgh the tax is 4.5% and in Philadelphia 4.1%, That applies even if the property owner and LLC owner are the same person.
2. Many properties come with low risk. Most callers have residential rental properties, sometimes just a single unit. Most litigation arising from a rental is the owner suing for unpaid rent. Claims for injuries by tenants or other invitees are uncommon. You should evaluate the level of risk before making an expensive property transfer.
3. There are lots of ways to reduce risk. Make sure you have adequate insurance for all risks, have a solid lease, require tenants to have renters insurance and maintain the property in a good state of repair. If you do these things, your risk will be greatly reduced.
We help our clients acquire, finance, sell and refinance all classes of commercial real estate. Whether you have one unit or one hundred, our attorneys can give you practical, affordable advice.