Asset Protection for Rental & Investment Properties
If you own Vermont real estate and use it as a rental or investment property, transferring the property into a Limited Liability Company (LLC) can be a powerful risk-management tool—when it is done correctly.
I regularly help Vermont property owners transfer real estate they already own into a LLC to reduce personal liability exposure and better protect their personal assets.
This is not a simple paperwork exercise. Done incorrectly, a LLC transfer can create financing problems, invalidate title insurance coverage, or fail to provide the liability protection the owner was seeking in the first place.
Why VT Property Owners Transfer Property to a LLC
Many of my clients choose to transfer property into a LLC for one primary reason: liability protection.
If a tenant or guest is injured at a rental property, a LLC can help limit claims to the assets owned by the LLC—rather than exposing the owner’s personal home, savings, or investments.
Additional benefits may include:
Separation of personal and rental assets
An added layer of privacy in land records
Clear ownership structure for multi-property portfolios
Professional credibility for rental operations
This strategy is especially common for:
Long-term rentals
Short-term rentals (Airbnb / VRBO / other STR services)
Second homes used as income properties
Out-of-state owners holding Vermont real estate
Important Risks to Understand Before Transferring to an LLC
Transferring Vermont property into a LLC is not risk-free. A responsible attorney should explain these issues clearly before preparing any deed.
Key considerations include:
Existing Mortgages
Most residential mortgages contain a due-on-sale or acceleration clause. While lenders do not always enforce these clauses for LLC transfers, they can. This risk must be evaluated carefully before proceeding.
Future Financing
Once property is owned by a LLC, future refinancing may require a commercial loan rather than a residential mortgage, often with different terms.
HOI Coordination
Home Owner’s Insurance policies must match the ownership structure. A deed transfer without updating insurance can create coverage gaps.
Title Insurance Coordination
Deeding to your LLC incorrectly could end your protection under your existing title Insurance policy; many Vermont attorneys are unaware of this common pitfall. I work with my title insurance underwriters to eliminate this risk entirely for my clients.
My role is to make sure clients understand these issues before the deed is recorded—not after.
OurProcess: Why This Is Not a DIY or Cut-Rate Service
When clients hire me for a LLC transfer, I do more than “draft a deed.”
I perform a limited, current-owner title search to confirm:
How title is currently vested
Whether prior deeds impose restrictions or requirements
Whether survivorship or estate provisions must be addressed
Many Vermont attorneys skip this step. As a result, deeds are frequently drafted incorrectly—or worse, recorded in a way that undermines the very protection the client was trying to achieve.
I take the extra step because getting the deed right is the entire point of the transfer.
Vermont LLC Formation & EIN Services Available
If you do not already have a LLC, I can:
Form a Vermont LLC
Obtain a federal EIN from the IRS
The LLC will be designed as a single member or dual member LLC for holding rental property
Alternatively, some of my clients have their accountant setup the LLC in states other than Vermont, or sometimes even in Vermont.
Either way is OK.
This allows the entire process to be handled cleanly and efficiently.
Is a LLC Transfer Right for You?
A LLC transfer may be appropriate if:
The property is used as a rental or income property
You are seeking liability protection
You understand and accept the mortgage-related risks
It may not be appropriate for:
Primary residences
Properties with complex financing restrictions
Situations where estate planning goals are the primary concern
If you are unsure, that is exactly when legal guidance is most valuable.
Schedule a Vermont LLC Property Transfer Review
If you own Vermont property and are considering transferring it into a LLC, I can help you evaluate the risks, prepare the correct deed, and ensure the transfer actually accomplishes what you intend.