Limited Liability Companies: A Limited Yet Informative Overview

A limited Liability company (LLC) is a flexible form of enterprise that blends elements of partnership and corporate structures.  An LLC is similar to a corporation in that it provides limited liability to its owners for the debts and actions of the LLC.  Other features of an LLC are more like a partnership, providing management flexibility and the benefit of pass-through taxation.

BIG Misnomer:

An LLC is often incorrectly called a “limited liability corporation” (instead of company), when in fact it is a hybrid business entity having certain characteristics of both a corporation and a partnership or sole partnership.

LLCs and Real Estate:

With regard to real estate, LLCs are usually formed by owners of investment/income –producing property to protect them from certain financial risks and provide them with pass-through taxation (see IRS LINK below).

Special Note:

It is important to understand that limited liability does not imply that owners are always fully protected from personal liabilities.  Courts can and sometimes will pierce the corporate veil of an LLC when some type of fraud or misrepresentation is involved.  Similarly, LLC rules and laws may vary from state to state.

Link to IRS Page on LLCs

MOST IMPORTANT NOTE:
Client questions regarding LLCs, how to form them, their benefits and/or disadvantages, should always be directed to and answered by a real estate or tax Attorney.

 

Southland Median Home Sale Price Climbs Again; Sales Rise Slightly Yr/Yr

As seen on DQnews.com

The median price paid for a Southern California home hit a 56-month high in March, rising 23.4 percent from a year earlier as the impact of foreclosures continued to fade and sales of mid- to high-end homes shot up. Total sales were the highest in six years for a March despite a sharp drop in sub-$300,000 deals, a real estate information service reported.

A total of 20,581 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was up 29.1 percent from 15,945 sales in February, and up 3.1 percent from 19,953 sales in March 2012, according to San Diego-based DataQuick.

Sales normally jump between February and March, with that month-to-month gain averaging 36.4 percent since 1988, when DataQuick’s statistics begin.

Last month’s sales were the highest for the month of March since 21,856 Southland homes sold in March 2007, but they were still 15.1 percent below the March average of 24,254 sales. The low for March sales was 12,808 in 2008, while the high was 37,030 in March 2004.

The median price paid for all new and resale houses and condos sold in the six-county Southland was $345,500 last month, up 8.0 percent from $320,000 in February and up 23.4 percent from $280,000 in March 2012. Last month’s median was the highest since July 2008, when it was $348,000.

The median has risen on a year-over-year basis for 12 consecutive months, and those gains have been double-digit – between 10.8 percent and 23.5 percent – since last August.

“It’s remarkable how much the housing scene has changed in a year. At this point in 2012 there were still plenty of folks sitting on the market’s sidelines, waiting to be sure the recovery was real. But gradually the psychology shifted as the economy picked up steam and mortgage rates fell to historic lows. We’re seeing the release of a lot of pent-up demand, especially in the middle and higher-priced neighborhoods where activity had been sluggish for years,” said John Walsh, DataQuick president.

Click here for entire article.

The “E” words of title…

The following 3 title terms -all beginning with the letter “e” – are common terms related to the title insurance industry.  They are also terms that people tend to confuse with one another.  Here are brief definitions of each to add to your real estate glossary:

Encumbrance: is the legal technical terminology for anything that affects or limits the title of a property.  There are voluntary encumbrances, such as mortgages, deeds of trust, leases, easements, liens, or restrictions and involuntary encumbrances, which include judgments, tax liens and child support liens.  Also, those things considered as potentially making the title defeasible are also encumbrances e.g., charging orders, building orders and structure alteration.

Encroachment: a term which implies, “advance beyond proper limits,” in American real property law describes an instance in which real property hangs from one property over the property line of another landowner’s premises.  The actual structure that encroaches might be a tree, bush, bay window, stairway, steps, stoop, garage, leaning fence, part of a building, or other fixture.

Easement:  is the right to use the real property of another without possessing it.  Easements are helpful for providing pathways across two or more pieces of land.  An easement is considered as a property right in itself at common law and is still treated as a type of property in most jurisdictions.  The most important thing to know about easements: there are many and varied types of easements and the rights of an easement holder vary substantially among jurisdictions from state to state.

Western Resources Title is proud to announce we are now licensed to service all 58 counties in California!