All Forum Posts by: Seth White

@Andrew Postell and @Garrett Diegel Thanks a bunch for your informed replies. I'll update with how things shake out. I will be talking to another insurance broker and my attorney. 

@Garrett Diegel Thanks Garret. Why would I not be protected from liability if I move the title from my name to an LLC? My preference would be to just get a landlord policy and then an umbrella policy, but we were worried the landlord policy would be a problem with Wells Fargo (lender).

@Andrew Postell Thanks for the reply. Our concern was that changing the policy from a residential policy to a landlord policy might cause some problems with the mortgage company. Is that not accurate? Lender is Wells Fargo. They review the insurance policy on an annual basis correct?

My parents titled a triplex to me in 2013 via quitclaim deed. The triplex was initially purchased as a single family home and converted to a triplex. My insurance broker is warning me that if I go to a landlord policy then the due on sale clause might be triggered due to the fact that it is now a non-owner occupied triplex. My lawyer warns me that if I transfer title to an LLC then the due on sale clause might also be triggered. I am concerned as I am not on the insurance policy as I'm not on the mortgage, and we have a homeowners policy only on the building. I can't seem to "double insure" the building by taking out an additional policy for me. My plan is to transfer title to LLC via quitclaim but the LLC won't be on the home's insurance. I know I wont' have loss coverage but at least I will have liability protection while I figure out what to do.

My primary question is if I do this, and do not change the insurance policy, will my lender know? Do they run title searches on existing properties? The mortgage terms are extremely favorable so I don't want to refinance, but I'm also looking into that.