Transferring Property Titles to Your Florida LLC

• November 11, 2024
• Contract Law

A common way to protect your personal assets is to transfer your property to a limited liability company (LLC). The process is deceptively simple—you have to:

• Own property, 
• Have or form an LLC, and 
• Transfer ownership to the LLC. 

In practice, transferring a property title to a Florida LLC is often much more complicated. Missteps or errors can lead to unintended consequences. You may end up with a much larger bill than you anticipated or learn your transfer did not accomplish what you were hoping. 

Hiring an experienced Florida business attorney like those at BrewerLong is the best way to ensure you transfer your property correctly and avoid harmful consequences. Our team was founded on building meaningful client relationships and providing clear guidance through complex legal issues like property title transfer to a Florida LLC.

Forming an LLC

Naturally, before you can transfer property to an LLC, you have to own property. Most clients who want to transfer title to an LLC already own property, but not all have established an LLC.

You need to follow several steps to form an LLC, which your attorney can assist with:

• Choose a name;
• Choose a registered agent;
• Create articles of organization and operating agreement;
• File your articles of organization with the Florida Department of State;
• Obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS); 
• Obtain any necessary business licenses; and
• Establish a bank account in the LLC’s name.

You can file with the Florida Department of State online or by mail. 

Can I Transfer My Property to an LLC?

You can transfer property you own into an LLC without triggering a reassessment as long as the ownership structure remains unchanged. For instance, if you own the property and transfer it into an LLC you own, or if you and your spouse jointly own the property and transfer it into an LLC you both own, there will be no reassessment.

Meet with Your Mortgage Lender

First, you must notify your mortgage company, if you have one, that you intend to transfer ownership. Many mortgages include provisions allowing lenders to accelerate the loan to require payment in full if you transfer the property. Even if you do not have to pay off the balance, you may have to refinance the property.

Decide Which Deed Type to Use

Most property owners who transfer ownership to an LLC use either a warranty deed or a quitclaim deed. Your business attorney can help you decide which to use based on your unique circumstances.

Warranty deeds promise a transfer “free and clear” of all other claims on the property, while quitclaim deeds offer no such protection. Transferring using a warranty deed typically requires an investigation to ensure there are no outstanding claims on the property, including mortgages.

One factor you may consider is whether the same individual or individuals who own the property also own the LLC. Quitclaim deeds are risky because they do not offer protection from claims the previous owner knew or should have known about. If the owners are the same, this risk may not exist. 

Another factor that may influence your decision is whether there is a mortgage on the property. If there is, you may have to further discuss the type of deed with your mortgage lender. Yet, a quitclaim deed does not transfer the mortgage—the individual or individuals on the mortgage are obligated to keep making payments.

Sign the Property over to the LLC

Once you decide which deed type works best for you, you complete the deed transfer paperwork. Then, you file the deed with your county recorder. 

When you file, you must pay the documentary stamp tax. For all Florida counties except Miami-Dade, you pay a tax of 70 cents per $100 of value in the transfer. In Miami-Dade County, you pay a tax of 60 cents on each $100 and a surtax of 45 cents on each $100 unless you transfer a single-dwelling family unit.

Update Paperwork and Policies Related to the Property

Finally, ensure you update all your paperwork and policies related to the property. If you have tenants, modify the lease to include the LLC’s name. Check with your title, property, and liability insurance companies. You will likely need to request new coverage in the name of the LLC or risk your property being uninsured.

Risks and Benefits of Transferring Title to Your LLC

Under Florida law, the taxable value of non-homestead property can only increase by 10% per year when there has been no change in ownership. A Florida court recently concluded that a couple who transferred property they owned 50/50 to an LLC where they held a 51/49 interest amounted to a change in ownership. As a result, the property was not protected by the 10% limitation on increases to its taxable value.

While transferring title to an LLC may not be right for everyone, it can offer financial protection, flexibility, and a tool for estate planning. In exchange, you may see higher taxes and pay higher insurance premiums.

Contact an Attorney

Transferring your property to an LLC can offer many benefits. However, there are risks involved, especially considering recent Florida court developments. If you are interested in transferring property titles to a Florida LLC, consult with an experienced BrewerLong business lawyer. We can offer our experience to strategize the most effective and efficient way to transfer ownership of your property to an LLC. We have been in practice for more than a decade and provide our business law services to companies big and small.

This blog post is provided on an “as is” and “as available” basis as of the date of publication. We disclaim any duty to update or correct any information contained in this blog post, including errors, even if we are notified about them. To the fullest extent permitted by law, we disclaim all representations or warranties of any kind, express or implied with respect to the information contained in this blog post, including, but not limited to, warranties of merchantability, fitness for a particular purpose, title, non-infringement, accuracy, completeness, and timeliness. We will not be liable for damages of any kind arising from or in connection with your use of or reliance on this blog post, including, but not limited to, direct, indirect, incidental, consequential, and punitive damages. You agree to use this blog post at your own risk. Regarding your particular circumstances, we recommend that you consult your own legal counsel–hopefully BrewerLong.

Michael Long

Michael Long, a distinguished Business and Litigation Attorney at BrewerLong, brings a unique blend of tenacity and insight to his practice, honed from his time as a decorated combat veteran in the Marines. Specializing in complex litigation, Michael adeptly navigates the intricacies of business break-ups, professional liability, and a wide array of disputes encompassing tax, trust, real estate, contract, intellectual property, and loan issues. His expertise extends to business counseling, where he skillfully handles commercial contracts, company creation, intellectual property challenges, and more. Michael’s approach is holistic; he leverages his transactional and litigation experience to foresee and tactically address both immediate and long-term client needs, ensuring practical, cost-effective solutions that maximize benefits while minimizing risks. His commitment to excellence is evident in his affiliations with prestigious organizations like the American Legion, Central Florida Christian Chamber of Commerce, and the Orange County Bar Association, among others. He’s a committed advocate, driven by a passion to deliver results and justice for his clients.

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