I want to transfer my rental property into an LLC. What is the best form to do that when it has a loan?
June 26, 2025
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When it's a transfer without consideration, you would usually use a quit claim deed, as it's the simplest method for transferring property.
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I want to transfer my rental into an LLC. What is the best form to do that when it has a loan?
Have you already formed the LLC for this purpose?
Yes.
Is the loan on the rental property a personal loan or a commercial loan?
Personal.
Is there anything else the lawyer should know before I connect you?
Nope. Just want to know if a quit claim or bargain and sale deed would be the best in Oregon.
Hi there! Welcome to AskALawyer. My name is Liz and I’ve been an attorney for over a decade. I’m here to assist you.
Have you spoken with your mortgage lender?
I have a property in Oregon that is now a rental. I need to know what is the best way to transfer this property into my LLC. Would a quit claim deed or bargain and sale deed be the best option when there is a loan on the property?
No, I don’t believe that it does.
Oh good, that is helpful. Will the LLC be paying anything for the property?
Thank you for clarifying. Do you know if the loan has an acceleration clause?
I have a rental property that addresses the repairs and care for the property.
Apologies, I meant for the transfer—will it be a sale or a transfer without consideration?
Transfer without consideration.
When it's a transfer without consideration, you would usually use a quit claim deed, as it's the simplest method for transferring property.
Will you also be moving the mortgage into the LLC's name?
No, not at this time.
In that case, you do need to inform your mortgage company. One issue that can arise is having the mortgage in one name and the property in another, which can lead to mixed personal and business finances.
Okay, if I was to change the loan to the LLC, would that be the best way to separate personal from business?
Correct. You would want the assets to be completely separate. Mixing personal and business assets can expose you to what's called piercing the corporate veil, where someone could potentially go after personal assets despite the LLC's liability protections.
