If you don't and the Grantor later sues to set the deed aside, it's possible the underwriter might deny liability as a matter known to the insured and not disclosed to the Company in writing prior to taking title.

@Galen MillerThree words - be careful here.The big issue is liability here.You have no idea what is going on with the seller LLC.Does the LLC have (unsecured) debts against it?

@Justin Holley it all depends and there is a lot of flexibility.Our PMC is able to pay insurance & taxes for owners as well as utilitieis on vacant & MF properties.The only thing we shy away from is mortgage payments - too much potential liability if we pay late due to our error or owner portfolio doesn't have needed funds.Pretty much anything specifically related to a property should probably be paid via the Property LLC for easier accounting/tracking.

They simply say that the first dollar you benefit from (either by taking cash or by purchasing less than you sold - lowering your liabilities) is a dollar of profit.  

Typically, you can purchase an umbrella policy for as little as $300-600 annually that offers a million dollars of liability coverage.

Now that you are behind the bank has to put this as a liability on their books and have $400k cash set asideBanks only require 10% reserves typically so that $400k is stopping them from lending approx 3.6M in loans 3.6M at 7% is a big number and will lose a lot more from this than $10-$20k on your loan.

Yes, there is a plethora of leases floating around the internet, but if you want to manage your property properly, it requires a lease agreement that fits the way you want to do business and helps you to cover costs, avoid liabilities, and increase revenue. 

Also, to clarify an LLC shields the assets within that LLC from inside and outside liability, whereas an umbrella policy only pays damages once you've already been (personally) found liable (if you have the investment property in your personal name). 

The buyer can't successfully refi then and is stuck with a potential liability they've overpaid for.Moreover, the other risk is that if the seller still has a mortgage and the buyer is making payments directly to the seller, the seller could collect the buyer's payments and stop making payments to their lender (pocketing money) until their lender forecloses.

So, time is money unless you do it properly and share the info with them.So, why would they want to take on all that liability for free?