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we have a commercial property that we have been taking out…

Customer Question
we have a commercial property...
we have a commercial property that we have been taking out of personal money for years just to meet obligations. Our town just added to our already growing cost - $400/ month for public sewer. We can no longer meet the growing expenses. There are 3 rentals- all being rented (2 apts and 1 commercial). It is an LLC. Our accountant suggested a deed in lieu of forclosure. What should we do?
Submitted: 8 years ago.Category: Real Estate Law
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Answered in 1 minute by:
6/9/2010
Real Estate Lawyer: Tina, Lawyer replied 8 years ago
Tina
Tina, Lawyer
Category: Real Estate Law
Satisfied Customers: 33,167
Experience: 17 years of legal experience including real estate law.
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Tina :

Thank you for contacting JA. I am working on your question now.

Tina :

Since the property is owned by an LLC, you would not personally be liable for any deficiency if the lender forecloses unless you personally guaranteed the loan. Therefore, you could dissolve the LLC and the lender will likely foreclose and be entitled to assets of the LLC but not your personal assets.

You can offer a deed in lieu of foreclosure or attempt a short sale if you do not wish to dissolve the corporation. However, the lender has no obligation to accept either of these options.

Tina :

 


Please let me know if you need clarification.

Best regards XXXXX XXXXX

Tina

___________________________________________________________________________________

Please press the "accept" button so I may be credited and paid for my time when I have answered your question. Positive feedback and a bonus are always appreciated. Thank you very much.

NOTE: This open forum is for educational purposes only and cannot constitute legal advice. It is recommended that you seek representation by a local attorney for all legal matters. I understand that you may be disappointed by the answer you received if it is not favorable to your situation. I work diligently to provide you with the correct answer under the law, whether it benefits you or not. Since I have no control over the development of the law, I ask you not to hold that against me. Please remember that I may not have critical facts concerning your situation unless you provide them to me. As always, I continue to be dedicated to providing you with professional and courteous service.

Customer:

we did personally guarantee the loan, and the only real estate owned by the LLC is this property - we do want to dissolve the LLC

Tina :

I see. Since you personally guaranteed the loan, you may need to consider filing for bankruptcy protection if the lender does not agree to a deed in lieu or a short sale and seeks a deficiency judgment against you during the foreclosure process.

Tina :

Good luck and take care.

Customer:

My husband and I both own the LLC and guaranteed the loan, however, only his name is XXXXX XXXXX personal home mortgage- could he assign the LLC to me only to keep the bank from trying to get assets that are in his name only?

Tina :

No. That would not prevent the lender from going after both of your assets since you both personally guaranteed the loan.

Tina :

 


NOTE: Please remember that I do not get credited for my work until you press the "accept" button. Thanks again!

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