Bawldguy Talking

Real = Estate=20 Investing Through Purposeful Planning

=AB Schools of Thought =97 And What Works For Real Estate = Investors=92=20 Retirements

Like Drivin=92 By Your Properties? They=92re Doin=92 A = Drive-By On Your=20 Retirement =BB

Property Transfers Without Recording =96 Effective Tool = In The Right=20 Situations

Posted @ 11:15 am - Filed under Asset=20 Protection

Must a deed be recorded to effectuate a transfer of real=20 property? Overwhelming responses to this question are always in = the=20 affirmative, however =97 the proper answer is the negative. Legal = ownership to=20 real property blossoms upon acceptance of a deed and nothing further is = required=20 of a buyer to enjoy all the benefits of ownership. So why all the fuss = about=20 recording -=96 because the recording system perfects your ownership = against=20 scurrilous imposters claiming their own right of ownership from a = previous=20 titleholder. Like the crack of a race pistol, the delivery of a deed = signals the=20 buyer to beat his competition to the recording finish line to perfect = his=20 ownership versus all who come in after. So, if you are content to hold = title=20 without recording, then you walk the plank in the hope it does not end = and=20 plunge you head first into a lawsuit over future claims of title.

Why the legal lecture? Simple, the system can be used to the = investor=92s=20 advantage when it comes to asset protection.

Legal Requirement to Transfer Real Property

Now it is universally accepted that to protect your interest in real = property=20 from the =93Others=94 (if you watched the series Lost you will = understand the=20 reference) you must record your deed. However, once you are on title = what=20 barriers, other than personal opinions and contentment with perceived = knowledge,=20 prevents you from transferring our property to an entity for asset = protection.=20 Nothing! The legal elements required to transfer real property are as=20 follows:

1. A deed which contains the following:

Grantor =96 the seller

Grantee =96 the buyer

Legal Description of property

Declaration of Intent to transfer

Consideration

2. The deed must be delivered to the Grantee

3. The Grantee must accept the deed

You will note that recording is not one of the = elements. At=20 the point in which you are the legally recorded title holder, subsequent = transfers (not sales) by you need not be protected because you = trump=20 all other claimants. No more plank.

Why is This of Interest

I bring this to your attention because there may come a point in your = investing when you would like to transfer title and not alert = third=20 parties to the change in ownership. Typically I write in terms = of=20 utilizing a land trust to mask title transfers into an LLC, however =97 = on=20 occasion, I will recommend to a client just to deed his property to his = LLC and=20 not record the deed. I might make this recommendation for the following=20 reasons:

A transfer into a land trust or entity is not exempt from recording=20 fees;

An investor has expressed a desire for asset protection, but would = like=20 flexibility for future dealings with his property. I.e., You plan to = refinance=20 the property in the near future and you do not want record multiple = transfers;=20 or

The use of a land trust will not protect the investor from a bank=20 accelerating the note if the transfer is discovered.

When I suggest this strategy I am often asked what happens if = I am=20 sued? My answer is =96- record the deed. Recording the deed = will put the=20 plaintiff on notice that you are not the legal owner of the property. = This will=20 not be considered a fraudulent transfer because the actual transfer took = place=20 before the lawsuit as evidenced by the date on the deed. It will = definitely=20 cause fits for the plaintiff because their options for recovery were = greatly=20 diminished upon discovering you do not personally own the property.

To further buttress your transfer, your tenants = should begin=20 making payments to the LLC that owns the property via the unrecorded = deed. I=20 suggest you list the LLC as an additional insured party on your = insurance=20 policy. All payments associated with the property should be paid from = the LLC.=20 Tax statements should be sent to the LLC. In short, the LLC is the legal = owner=20 of the property even though it does not appear on title and you should = operate=20 accordingly.

BawldGuy Here: Print this post. Save it. You=92ll = thank me=20 later.

This entry was posted on Wednesday, February 16th, 2011 = at 11:15 am=20 and is filed under Asset=20 Protection. You can follow any responses to this entry through the = RSS=20 2.0 feed. You can leave=20 a response, or trackback from your own site.

3 comments to =93Property Transfers Without Recording = =96 Effective=20 Tool In The Right Situations=94

=20

Rob on February=20 17th, 2011 at 7:09 am said:

So how do you retain title insurance?

I can=92t imagine you would get a binder on an unrecorded=20 deed.

=20

Clint on February=20 17th, 2011 at 9:18 am said:

Rob,

You obtained title insurance when you purchased the property. When = deed the=20 property into an LLC that you own I don=92t believe this will be a = problem=20 because you own the entity. Where do you see a problem arising? I cant = think=20 of a situation where this would come up.

=20

Rob on February=20 17th, 2011 at 10:31 am said:

From my exeperience, 0nce you transfer the property, recorded or = not, the=20 title insurance company will take the position that a voluntary = transfer=20 occurs that terminates coverage, even if it is from one related party = to=20 another.

A good illustration of this in California is Kwok v. Transnation = Title.

http://caselaw.findlaw.com/ca-court-of-appeal/1487627.html=

MAIN NAVIGATION

BLOG SYNDICATION

PODCASTS

Purposef= ul=20 Planning
Grandpa=20 Economics
= Purposeful=20 Planning II
Close to=20 Retirement

FREE REPORTS

META

Log = in

").ap= pend(l.responseText.replace(nb,"")).find(f):l.responseText);d&&h.each(d,[= l.responseText,k,l])}});return this},serialize:function(){return = c.param(this.serializeArray())},serializeArray:function(){return = this.map(function(){return = this.elements?c.makeArray(this.elements):this}).filter(function(){return = this.name&&=0A= !this.disabled&&(this.checked||ob.test(this.nodeName)||pb.test(this.type)= )}).map(function(a,b){var d=3Dc(this).val();return = d=3D=3Dnull?null:c.isArray(d)?c.map(d,function(e){return{name:b.name,valu= e:e}}):{name:b.name,value:d}}).get()}});c.each("ajaxStart ajaxStop = ajaxComplete ajaxError ajaxSuccess ajaxSend".split(" = "),function(a,b){c.fn[b]=3Dfunction(d){return = this.bind(b,d)}});c.extend({get:function(a,b,d,e){if(c.isFunction(b)){e=3D= e||d;d=3Db;b=3Dnull}return = c.ajax({type:"GET",url:a,data:b,success:d,dataType:e})},=0A= getScript:function(a,b){return = c.get(a,null,b,"script")},getJSON:function(a,b,d){return = c.get(a,b,d,"json")},post:function(a,b,d,e){if(c.isFunction(b)){e=3De||d;= d=3Db;b=3D{}}return = c.ajax({type:"POST",url:a,data:b,success:d,dataType:e})},ajaxSetup:functi= on(a){c.extend(c.ajaxSettings,a)},ajaxSettings:{url:location.href,global:= true,type:"GET",contentType:"application/x-www-form-urlencoded",processDa= ta:true,async:true,xhr:function(){return new = E.XMLHttpRequest},accepts:{xml:"application/xml, = text/xml",html:"text/html",=0A= script:"text/javascript, application/javascript",json:"application/json, = text/javascript",text:"text/plain",_default:"*/*"}},ajax:function(a){var = b=3Dc.extend(true,{},c.ajaxSettings,a),d,e,f,h=3Db.type.toUpperCase(),l=3D= qb.test(h);b.url=3Db.url.replace(ub,"");b.context=3Da&&a.context!=3Dnull?= a.context:b;if(b.data&&b.processData&&typeof = b.data!=3D=3D"string")b.data=3Dc.param(b.data,b.traditional);if(b.dataTyp= e=3D=3D=3D"jsonp"){if(h=3D=3D=3D"GET")T.test(b.url)||(b.url+=3D(ja.test(b= .url)?"&":"?")+(b.jsonp||"callback")+"=3D?");else if(!b.data||=0A= !T.test(b.data))b.data=3D(b.data?b.data+"&":"")+(b.jsonp||"callback")+"=3D= ?";b.dataType=3D"json"}if(b.dataType=3D=3D=3D"json"&&(b.data&&T.test(b.da= ta)||T.test(b.url))){d=3Db.jsonpCallback||"jsonp"+mb++;if(b.data)b.data=3D= (b.data+"").replace(T,"=3D"+d+"$1");b.url=3Db.url.replace(T,"=3D"+d+"$1")= ;b.dataType=3D"script";var = k=3DE[d];E[d]=3Dfunction(m){if(c.isFunction(k))k(m);else{E[d]=3DB;try{del= ete = E[d]}catch(p){}}f=3Dm;c.handleSuccess(b,w,e,f);c.handleComplete(b,w,e,f);= r&&r.removeChild(A)}}if(b.dataType=3D=3D=3D"script"&&b.cache=3D=3D=3Dnull= )b.cache=3D=0A= false;if(b.cache=3D=3D=3Dfalse&&l){var = o=3Dc.now(),x=3Db.url.replace(rb,"$1_=3D"+o);b.url=3Dx+(x=3D=3D=3Db.url?(= ja.test(b.url)?"&":"?")+"_=3D"+o:"")}if(b.data&&l)b.url+=3D(ja.test(b.url= )?"&":"?")+b.data;b.global&&c.active++=3D=3D=3D0&&c.event.trigger("ajaxSt= art");o=3D(o=3Dsb.exec(b.url))&&(o[1]&&o[1].toLowerCase()!=3D=3Dlocation.= protocol||o[2].toLowerCase()!=3D=3Dlocation.host);if(b.dataType=3D=3D=3D"= script"&&h=3D=3D=3D"GET"&&o){var = r=3Dt.getElementsByTagName("head")[0]||t.documentElement,A=3Dt.createElem= ent("script");if(b.scriptCharset)A.charset=3Db.scriptCharset;=0A= A.src=3Db.url;if(!d){var = C=3Dfalse;A.onload=3DA.onreadystatechange=3Dfunction(){if(!C&&(!this.read= yState||this.readyState=3D=3D=3D"loaded"||this.readyState=3D=3D=3D"comple= te")){C=3Dtrue;c.handleSuccess(b,w,e,f);c.handleComplete(b,w,e,f);A.onloa= d=3DA.onreadystatechange=3Dnull;r&&A.parentNode&&r.removeChild(A)}}}r.ins= ertBefore(A,r.firstChild);return B}var = J=3Dfalse,w=3Db.xhr();if(w){b.username?w.open(h,b.url,b.async,b.username,= b.password):w.open(h,b.url,b.async);try{if(b.data!=3Dnull&&!l||a&&a.conte= ntType)w.setRequestHeader("Content-Type",=0A= b.contentType);if(b.ifModified){c.lastModified[b.url]&&w.setRequestHeader= ("If-Modified-Since",c.lastModified[b.url]);c.etag[b.url]&&w.setRequestHe= ader("If-None-Match",c.etag[b.url])}o||w.setRequestHeader("X-Requested-Wi= th","XMLHttpRequest");w.setRequestHeader("Accept",b.dataType&&b.accepts[b= .dataType]?b.accepts[b.dataType]+", */*; = q=3D0.01":b.accepts._default)}catch(I){}if(b.beforeSend&&b.beforeSend.cal= l(b.context,w,b)=3D=3D=3Dfalse){b.global&&c.active--=3D=3D=3D1&&c.event.t= rigger("ajaxStop");w.abort();return false}b.global&&=0A= c.triggerGlobal(b,"ajaxSend",[w,b]);var = L=3Dw.onreadystatechange=3Dfunction(m){if(!w||w.readyState=3D=3D=3D0||m=3D= =3D=3D"abort"){J||c.handleComplete(b,w,e,f);J=3Dtrue;if(w)w.onreadystatec= hange=3Dc.noop}else = if(!J&&w&&(w.readyState=3D=3D=3D4||m=3D=3D=3D"timeout")){J=3Dtrue;w.onrea= dystatechange=3Dc.noop;e=3Dm=3D=3D=3D"timeout"?"timeout":!c.httpSuccess(w= )?"error":b.ifModified&&c.httpNotModified(w,b.url)?"notmodified":"success= ";var = p;if(e=3D=3D=3D"success")try{f=3Dc.httpData(w,b.dataType,b)}catch(q){e=3D= "parsererror";p=3Dq}if(e=3D=3D=3D"success"||e=3D=3D=3D"notmodified")d||=0A= c.handleSuccess(b,w,e,f);else = c.handleError(b,w,e,p);d||c.handleComplete(b,w,e,f);m=3D=3D=3D"timeout"&&= w.abort();if(b.async)w=3Dnull}};try{var = g=3Dw.abort;w.abort=3Dfunction(){w&&Function.prototype.call.call(g,w);L("= abort")}}catch(i){}b.async&&b.timeout>0&&setTimeout(function(){w&&!J&&L("= timeout")},b.timeout);try{w.send(l||b.data=3D=3Dnull?null:b.data)}catch(n= ){c.handleError(b,w,null,n);c.handleComplete(b,w,e,f)}b.async||L();return= w}},param:function(a,b){var = d=3D[],e=3Dfunction(h,l){l=3Dc.isFunction(l)?l():l;d[d.length]=3D=0A= encodeURIComponent(h)+"=3D"+encodeURIComponent(l)};if(b=3D=3D=3DB)b=3Dc.a= jaxSettings.traditional;if(c.isArray(a)||a.jquery)c.each(a,function(){e(t= his.name,this.value)});else for(var f in a)da(f,a[f],b,e);return = d.join("&").replace(tb,"+")}});c.extend({active:0,lastModified:{},etag:{}= ,handleError:function(a,b,d,e){a.error&&a.error.call(a.context,b,d,e);a.g= lobal&&c.triggerGlobal(a,"ajaxError",[b,a,e])},handleSuccess:function(a,b= ,d,e){a.success&&a.success.call(a.context,e,d,b);a.global&&c.triggerGloba= l(a,"ajaxSuccess",=0A= [b,a])},handleComplete:function(a,b,d){a.complete&&a.complete.call(a.cont= ext,b,d);a.global&&c.triggerGlobal(a,"ajaxComplete",[b,a]);a.global&&c.ac= tive--=3D=3D=3D1&&c.event.trigger("ajaxStop")},triggerGlobal:function(a,b= ,d){(a.context&&a.context.url=3D=3Dnull?c(a.context):c.event).trigger(b,d= )},httpSuccess:function(a){try{return!a.status&&location.protocol=3D=3D=3D= "file:"||a.status>=3D200&&a.status<300||a.status=3D=3D=3D304||a.status=3D= =3D=3D1223}catch(b){}return false},httpNotModified:function(a,b){var = d=3Da.getResponseHeader("Last-Modified"),=0A= e=3Da.getResponseHeader("Etag");if(d)c.lastModified[b]=3Dd;if(e)c.etag[b]= =3De;return a.status=3D=3D=3D304},httpData:function(a,b,d){var = e=3Da.getResponseHeader("content-type")||"",f=3Db=3D=3D=3D"xml"||!b&&e.in= dexOf("xml")>=3D0;a=3Df?a.responseXML:a.responseText;f&&a.documentElement= .nodeName=3D=3D=3D"parsererror"&&c.error("parsererror");if(d&&d.dataFilte= r)a=3Dd.dataFilter(a,b);if(typeof = a=3D=3D=3D"string")if(b=3D=3D=3D"json"||!b&&e.indexOf("json")>=3D0)a=3Dc.= parseJSON(a);else = if(b=3D=3D=3D"script"||!b&&e.indexOf("javascript")>=3D0)c.globalEval(a);r= eturn a}});=0A= if(E.ActiveXObject)c.ajaxSettings.xhr=3Dfunction(){if(E.location.protocol= !=3D=3D"file:")try{return new E.XMLHttpRequest}catch(a){}try{return new = E.ActiveXObject("Microsoft.XMLHTTP")}catch(b){}};c.support.ajax=3D!!c.aja= xSettings.xhr();var = ea=3D{},vb=3D/^(?:toggle|show|hide)$/,wb=3D/^([+\-]=3D)?([\d+.\-]+)(.*)$/= ,ba,pa=3D[["height","marginTop","marginBottom","paddingTop","paddingBotto= m"],["width","marginLeft","marginRight","paddingLeft","paddingRight"],["o= pacity"]];c.fn.extend({show:function(a,b,d){if(a||a=3D=3D=3D0)return = this.animate(S("show",=0A= 3),a,b,d);else{d=3D0;for(var = e=3Dthis.length;d=3D0;e--)if(d[e].elem=3D=3D=3Dthis){b&&d[e](true);d.spli= ce(e,1)}});b||this.dequeue();return = this}});c.each({slideDown:S("show",1),slideUp:S("hide",1),slideToggle:S("= toggle",1),fadeIn:{opacity:"show"},fadeOut:{opacity:"hide"},fadeToggle:{o= pacity:"toggle"}},function(a,b){c.fn[a]=3Dfunction(d,e,f){return = this.animate(b,=0A= d,e,f)}});c.extend({speed:function(a,b,d){var e=3Da&&typeof = a=3D=3D=3D"object"?c.extend({},a):{complete:d||!d&&b||c.isFunction(a)&&a,= duration:a,easing:d&&b||b&&!c.isFunction(b)&&b};e.duration=3Dc.fx.off?0:t= ypeof e.duration=3D=3D=3D"number"?e.duration:e.duration in = c.fx.speeds?c.fx.speeds[e.duration]:c.fx.speeds._default;e.old=3De.comple= te;e.complete=3Dfunction(){e.queue!=3D=3Dfalse&&c(this).dequeue();c.isFun= ction(e.old)&&e.old.call(this)};return = e},easing:{linear:function(a,b,d,e){return = d+e*a},swing:function(a,b,d,e){return(-Math.cos(a*=0A= Math.PI)/2+0.5)*e+d}},timers:[],fx:function(a,b,d){this.options=3Db;this.= elem=3Da;this.prop=3Dd;if(!b.orig)b.orig=3D{}}});c.fx.prototype=3D{update= :function(){this.options.step&&this.options.step.call(this.elem,this.now,= this);(c.fx.step[this.prop]||c.fx.step._default)(this)},cur:function(){if= (this.elem[this.prop]!=3Dnull&&(!this.elem.style||this.elem.style[this.pr= op]=3D=3Dnull))return this.elem[this.prop];var = a=3DparseFloat(c.css(this.elem,this.prop));return = a&&a>-1E4?a:0},custom:function(a,b,d){function e(l){return f.step(l)}=0A= var = f=3Dthis,h=3Dc.fx;this.startTime=3Dc.now();this.start=3Da;this.end=3Db;th= is.unit=3Dd||this.unit||"px";this.now=3Dthis.start;this.pos=3Dthis.state=3D= 0;e.elem=3Dthis.elem;if(e()&&c.timers.push(e)&&!ba)ba=3DsetInterval(h.tic= k,h.interval)},show:function(){this.options.orig[this.prop]=3Dc.style(thi= s.elem,this.prop);this.options.show=3Dtrue;this.custom(this.prop=3D=3D=3D= "width"||this.prop=3D=3D=3D"height"?1:0,this.cur());c(this.elem).show()},= hide:function(){this.options.orig[this.prop]=3Dc.style(this.elem,this.pro= p);this.options.hide=3Dtrue;=0A= this.custom(this.cur(),0)},step:function(a){var = b=3Dc.now(),d=3Dtrue;if(a||b>=3Dthis.options.duration+this.startTime){thi= s.now=3Dthis.end;this.pos=3Dthis.state=3D1;this.update();this.options.cur= Anim[this.prop]=3Dtrue;for(var e in = this.options.curAnim)if(this.options.curAnim[e]!=3D=3Dtrue)d=3Dfalse;if(d= ){if(this.options.overflow!=3Dnull&&!c.support.shrinkWrapBlocks){var = f=3Dthis.elem,h=3Dthis.options;c.each(["","X","Y"],function(k,o){f.style[= "overflow"+o]=3Dh.overflow[k]})}this.options.hide&&c(this.elem).hide();if= (this.options.hide||=0A= this.options.show)for(var l in = this.options.curAnim)c.style(this.elem,l,this.options.orig[l]);this.optio= ns.complete.call(this.elem)}return = false}else{a=3Db-this.startTime;this.state=3Da/this.options.duration;b=3D= this.options.easing||(c.easing.swing?"swing":"linear");this.pos=3Dc.easin= g[this.options.specialEasing&&this.options.specialEasing[this.prop]||b](t= his.state,a,0,1,this.options.duration);this.now=3Dthis.start+(this.end-th= is.start)*this.pos;this.update()}return = true}};c.extend(c.fx,{tick:function(){for(var a=3D=0A= c.timers,b=3D0;b