Buying Property as an LLC or Trust

Investors and increasingly ordinary buyers take title through an LLC or a trust. Both are entirely normal. Both require documents that take time to assemble, and the request always seems to arrive later than it should.

If you are buying through an LLC

• Articles of organisation as filed with the state
• Operating agreement, which is what actually establishes who may bind the company
• Certificate of good standing, current
• Sometimes a resolution authorising this specific purchase and naming the signer

If you are buying through a corporation

Articles of incorporation, a current certificate of good standing, and a corporate resolution naming the authorised signers. The resolution matters — without it there is no record that the person signing had authority.

If you are buying through a trust

The trust agreement, or in some cases a certificate of trust that discloses the trustee and their powers without exposing the full terms. We need to establish that the trustee has authority to acquire and encumber real property.

Why lenders complicate it

Many residential lenders will not lend to an entity, or will require a personal guarantee. Some require the property to be taken personally and transferred to the entity afterwards — which has its own consequences, including potentially triggering a due-on-sale clause. Ask the lender before you assume.

The practical advice

Tell us at contract, not at closing. Gathering entity documents is rarely difficult but it is never instant, and a good standing certificate that has lapsed takes time to restore. It is one of the more avoidable delays we see.

Note: general information for Pennsylvania and Alabama property owners, not legal or tax advice. Rates, taxes, eligibility and deadlines are set by statute and by each state’s filed rate schedules and can change. Confirm the specifics with us and with a qualified professional before relying on them for a transaction.