Purchasing real estate under an entity name is a common investment strategy for domestic and international investors in South Florida. Entity structures, including limited liability companies (LLCs), corporations and trusts, offer numerous advantages – among the most favorable for many investors is the personal liability protection an entity structure offers. 

Liability Protection Under an LLC

When you invest in real estate under an entity name, the entity itself assumes liability for the property. Under this ownership structure, your personal assets are shielded from lawsuits, debts or claims arising from your investments. Note, however, that these protections are not absolute. If, for example, you secure a loan to finance the investment, you may be required to sign a personal guarantee. A personal guarantee means your personal assets are still at risk if the entity defaults on the loan.

Moreover, if you fail to maintain the legal and financial separation between your personal and entity affairs, courts may say that you “pierced the corporate veil” and hold you personally liable for claims against the entity.

On the whole, however, investing under an entity name can be advantageous so long as you abide by legal requirements and take other precautions to protect yourself and the entity. Primary advantages include:

  • Entity ownership allows for the separation of personal and business assets
  • An LLC structure mitigates risk if you own multiple properties (i.e., a lawsuit involving one property won’t affect the others).
  • A registered U.S. entity boosts credibility and establishes a framework for ownership, responsibilities and liability

If your investment strategy includes purchasing real estate under an entity name, we suggest partnering with an experienced real estate and business law attorney to maximize liability protection and ensure proper entity formation and compliance with all Florida laws. 

Contact Us at Sirulnik Law to Get Started

Call us at the Law Offices of Alex D. Sirulnik, P.A. and ADS Title Services, Inc. to ask your questions and seek legal counsel on successfully purchasing, managing and profiting from your Florida real estate investment. Contact our team today to learn more.