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I want to change title on a triplex from myself into an LLC, but my mortgagor has advised that they generally do not authorize this transfer. How is this generally done?

Submitted: 366 days and 2 hours ago.

Category: Estate Law

Value: $30

Status: AWAITING CUSTOMER ACTION

Los Angeles, California

Posted by David Kennett 366 days and 2 hours ago.

Answer

Dear pnelapw - The transfer is easy since all you need is a quit claim deed from you to the LLC. However it will be up to the lender to approve any transfer since the mortgage probably has a "due on sale" clause which means you cannot transfer or sell the property with either the approval of the lender or paying off the mortgage.

If the lender will not approve the transfer the only thing you can do is to re-finance the property with the LLC.

David Kennett - JD - Attorney at Law

366 days and 2 hours ago.

Reply

So should I do the quit claim deed and see if the mortgagor protests, and then if they do, then try to re-finance? Would this require a commercial loan?

Posted by David Kennett 366 days and 2 hours ago.

Answer

I am not a lending expert and that would be up to the lender with respect to a commercial loan as it is not a legal matter. I would not do the quit claim until you know for certain that the mortgage company will not call your loan due to the transfer. At that point it would be too late to undo the transfer and if you can't refinance for some reason the lender could foreclose. I would get the re-financing done first and then transfer the property

Dave Kennett

366 days and 1 hours ago.

Reply

Is the lender legally required (in CA) to be reasonable in determining whether to approve a title transfer that does not change the ownership interest?

Accepted Answer

I'm not certain what you mean by "reasonable". A due on sale clause is for the lender's protection and most lenders will not approve a transfer unless its is between husband and wife. This is not an unusual situation and I know of no law or requirement that would force the lender to approve the transfer against their wishes.

Dave Kennett

Accepts:
Expert:	David Kennett
Pos. Feedback:	100.0 %
Answered:	11/21/2008

Attorney

25 years practicing attorney

366 days and 1 hours ago.

Reply

Thank you.

Posted by David Kennett 366 days and 1 hours ago.

Answer

No problem and thanks for using our service - Dave

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Estate Law

Have your own Estate Law question?

Question

I want to change title on a triplex from myself into an LLC, but my mortgagor has advised that they generally do not authorize this transfer. How is this generally done?

Optional Information

Los Angeles, California

Answer

Reply

So should I do the quit claim deed and see if the mortgagor protests, and then if they do, then try to re-finance? Would this require a commercial loan?

Answer

Reply

Is the lender legally required (in CA) to be reasonable in determining whether to approve a title transfer that does not change the ownership interest?

Accepted Answer

Reply

Thank you.

Answer

No problem and thanks for using our service - Dave

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