We’ve recently been asked to clear up a few things about how to transfer title of property to a business entity, and more specifically, how to disclose the vesting of a business entity on a deed when transferring title. At docprepper.com it’s our job to do such things, and we love our job, so we thought we’d share.
Ok, I have my deed, I know who the grantor is… how do I refer to my business?
This is where things get tricky. I had someone the other day give me the name of their business to use as the “Grantee” on our deed. We’ll call it “INVESTMENT INDUSTRIES, LLC”. Sounds good, right? Except when I tried to verify that name with the Secretary of State (actually in this case it was Arizona, so it was the Corporation Commission) they had no record of the name. When I went back to the customer and found out he had never registered his entity. He simply made it up and applied for a Federal Tax ID number!
What if I hadn’t checked!? What if “INVESTMENT INDUSTRIES, LLC” was someone else already, and we just recorded a deed into their business!? Needless to say, this could cause costly problems down the road.
Here’s another common mistake, as stated in an email from one of our customers:
“The Deed would transfer title to the referenced property to “ABC LIMITED PARTNERSHIP”. There is no need to include “a Canadian Limited Partnership” on title to the property.”
People often assume they know what is and isn’t required to disclose on a deed… but just for kicks, let’s see what a Title Officer has to say about it.
Here’s his reply:
“No, if the domicile and entity type are not disclosed then there is question as to whether or not it is an entity capable of holding title. It can be left off but they will have problems later. We would not insure the deed without the business entity type and domicile being disclosed.”
As you can see, it often pays to consult with an expert! Keep in mind the county recorder‘s office will not call these mistakes to your attention. The onus is on you to make sure the document is correct.
So bottom line, how should the grantee vesting read? Like this:
DOCPREPPER PROPERTIES LLC, an Arizona Limited Liability Company