Which state do I record a mortgage assignment in?
Is there anything special that needs to be done with the assignment?
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Even though your LLC and trust are in Florida, Colorado law will dictate how this assignment is recorded, as the property is there.
Drafting and recording this properly is vital for your trust to be legally recognized as the new lender. The assignment must be recorded in the Colorado county where the property is located, providing public notice of the ownership change.
This document should clearly identify the original mortgage and note details. While less common, review the original mortgage for any “due-on-transfer” clauses, even though your trust is the sole member of the LLC. Finally, the borrower must be formally notified of the assignment and provided with your trust’s contact information for payments.
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I am transferring a mortgage from a Florida LLC to a trust located in Florida. The mortgage is for a property in Colorado that I sold through the LLC last month.
Is there anything special that needs to be done with the assignment?
I understand the complexity of your situation. Have you already contacted the mortgage lender regarding the transfer from the Florida LLC to the trust in Florida?
No, the Florida LLC is the lender and is assigning the note to the trust in Florida.
Are both the Florida LLC and the trust properly registered and in good standing in their respective states?
Yes
Is there anything else the Real Estate Lawyer should know before I connect you? Rest assured they’ll be able to help with your mortgage assignment.
That's about it.
Hello and thank you for reaching out to AskaLawyer! I’m Jon, a licensed attorney with over 13 years of experience, and I’m here to help.
I know legal matters can feel overwhelming, but you're in good hands. I’ll do my best to make things clear and provide you with the guidance you need. Let’s work together to find the right solution for your situation.
You, the company, are the lender here holding the mortgage for the property?
Yes
Okay, and you want to know what you need to do with the assignment you signed?
My trust is the only member of the LLC, and I want to move it to the trust and close the LLC.
Understood! I think I have all the information I need, but is there anything else you'd like to add before I get started on your answer? If not, I'll start working on a response for you right away.
That is it.
Got it. I just need a few minutes to finish typing out a complete response for you. It won’t take long.
Even though your LLC and trust are in Florida, Colorado law will dictate how this assignment is recorded, as the property is there.
Drafting and recording this properly is vital for your trust to be legally recognized as the new lender. The assignment must be recorded in the Colorado county where the property is located, providing public notice of the ownership change.
This document should clearly identify the original mortgage and note details. While less common, review the original mortgage for any “due-on-transfer” clauses, even though your trust is the sole member of the LLC. Finally, the borrower must be formally notified of the assignment and provided with your trust’s contact information for payments.
Next, transfer your membership interest in the Florida LLC to your trust. Your LLC's operating agreement will guide this process; you might need to amend it if it doesn't allow such transfers. Draft an “Assignment of Membership Interest” document to formally transfer ownership to your trust, ideally signed and notarized. After the transfer, update your LLC's internal records and consider if any filings with the Florida Department of State (Sunbiz) are required.
Once the mortgage note is assigned and LLC assets transferred, you can proceed with dissolving your Florida LLC. This involves formally voting to dissolve the LLC, winding up its affairs (collecting debts, paying liabilities, distributing assets to your trust), and filing Articles of Dissolution with the Florida Department of State. Don’t forget to address all federal, state, and local tax obligations and file final returns; a tax professional can help here.
It’s generally best to ensure the mortgage assignment is fully complete and recorded before formally dissolving the LLC.
I would also strongly suggest you have a Florida business lawyer locally help you with this process to make sure it is done correctly. You can visit Avvo.com to find highly rated legal professionals in your area.
Thank you.
I do hope the information I provided was helpful and addressed your question. If there's anything else you need, please don't hesitate to reach out—I’m always happy to assist. Wishing you a fantastic day ahead!
