Q: Who owns a house when it is in a limited liability company and who would be liable if the owner of the home is sued?
A: If a house is owned by a limited liability company (LLC), by definition, the owner is that company. In owning a house, an LLC would be no different that a corporation owning the home. Just like a person, an LLC or a corporation can hold title to a house and other sorts of real estate.
If title to the home is in the LLC, the LLC is responsible payment of any judgments owed, resulting from a lawsuit. If the LLC’s only asset is the home, the home might have to be sold to satisfy the judgment from the litigation or the owners of the LLC would have to come up with money to pay of the judgment.
If the judgment is worth more than the value of the house and if the members (owners) of the LLC have kept proper documentation for the company, the members should not be liable for any money owed above the value of the home.
On one issue, however, you need to be cautious: If the LLC borrowed money and the members of the LLC signed personally for the loan, each member will still owe the money back to the lender. The LLC will not shield the members from amounts owed to the lender.
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