Hello All, My In-Laws are building a 1 bedroom apartment that is detached from my home on my property. It will have its own address, but is still on my land. As my town only allows 1 owner per lot of land, the apartment they are building will be in my name and will be fully gifted to me by my in-laws. I spoke with my tax accountant and he said that I can charge them fair market rent, and claim the expenses from the rental. I do have two other rental properties that are not currently in an LLC as the banks wouldn't allow that. Since the new property is being paid for in cash, I dont have that limitation from a bank. So my question is, can I set this up in an LLC? This would give my in-laws some peace of mind, since they are concerned that if something were to ever happen at my other rentals and I were to be sued, then they could take my primary residence and their new home. I do have a 1M umbrella along with the standard 500k liability on each property. Thanks for your help with this.
Real Estate Broker · Hyde Park Tampa, FL · Member since 2019 · 2k+ posts · 3k+ votes
2y
The muncipality has already advised you that's it is not possible and like all others that I know of, there can only be one owner on a single parcel regardless of the number of structures. And, let's make sure we are using the same language here...building a structure on your existing property does not make it a new property. The property would be defined by the lot/parcel - and the structures on it. You can have multiple structures on a lot but the titling is based on the property itself.
It may be helpful to review the main reasons that Landlords get sued with your in-laws - as well as advising them on the measures you have in place that negate these issues. Here's a list:
@Randy Babineau you really need to talk to a lawyer about creating an LLC for your rental properties. Get actual legal advise. For your situation, Anderson Advisors would be a good place to reach out to on getting a base level of protection going. And @Patricia Steiner did a solid job on the single parcel part of your question.