LLC

[David Burling]

Hi folks,

I just purchased my first rental property and would really appreciate some advice regarding LLCs. I am financing the property and I have already had the deed placed under the LLC. I've read about how some lenders have a clause in the mortgage contract which requires that the entire mortgage be paid off if the property is put into an LLC. I couldn't find anyone who could tell me how the lender would know that the property had been put into an LLC. I think I may have found the answer to that question recently when I called my insurance agent and asked about changing the name on the home owners policy from my name to my LLC name. He said no problem, except he would have to inform my lender first. I'm guessing that phone call is what will result in the bank activating the "due on transfer" clause (or whatever it's called). So my question is, do I lose the protection that the LLC is intended to provide if I keep the Homeowners policy under my own name instead of the LLC name?

Thanks!

-Dave Burling