Private Property Disadvantages

Disadvantages of Buying a Real Estate Property under an LLC

1. Difficulty in Formation

Forming an LLC for the purpose of buying a property may not be as troublesome as forming a corporation, but it is certainly more tedious than forming a partnership for joint ownership. However, these types of property ownership provides a certain protection against personal liabilities and it is still an appealing advantage when you look at it from a much larger perspective.

2. Personal Liability Shield is Not Absolute

Those who have invested in an LLC tends to believe that the protection they are afforded is an ultimate guarantee in which the only possible loss that they can incur is the amount of their investment. However, once you have violated the

Lower Incidental Costs

Most affairs that are involved under the land trust agreements are not divulged. Therefore, the costs related to this transaction are comparatively lower compared to other property ownership types. Since the beneficial interest is only a personal property, you avoid other forms of taxation, such as transfer taxes and the property will not be assessed further for additional taxable values. However, you cannot claim any tax benefits when you purchase the property using a land trust ownership.

2. Provides Privacy for the Beneficiary

The name of the beneficiary is not listed on the title, so the trustee bears the task of managing the affairs of the property. The sales price is also considered private, since you can only choose to sell your beneficial interest in the property. If you are the type of person who does not want to disclose your personal and business affairs, the land trust ownership agreement is perfectly suited for

At a minimal administration fee, there is someone that handles and signs all of the legal documents relating to the property. In addition to this, there is no need to notarize the documents since it is purchased under a land trust ownership agreement.

Disadvantages of Buying a Real Estate Property under a Land Trust Ownership

1. Venue for Fraud

The privacy that is entailed from purchasing property through a land trust ownership agreement has made others to believe that it is an easy avenue to commit fraud. Since the name of the real owner per se is not listed, it weakens their credit rating. Therefore, creditors might find it hard to go after you since your ownership of this property is not listed.

2 Land Trust Does Not Have Legal Codes in Some US States

Land trust is legal everywhere. However, there are certain US States without a specified legal statute in the process of owning and regulating a land trust. If there are questions regarding the legalities of the land trust transaction in these states, they are interpreted using common law which means that a court ruling is heard or it is based on a precedent