Buying condo thru a trust

"How does someone prepare a condo board package when their condo is being purchased by a trust created for their benefit"

Can you elaborate on this?

Interesting question.... can someone provide the pro's and con's of buying a condo in a trust, a corporation, vs. personal ownership.

Thanks!

It sounds like this person wants to have a trust created and buy his/her own condo, and this owner would be the grantor and beneficiary of the trust? or similar?

I guess it all depends on who is funding the trust? As long as the owner is a majority beneficiary and retains occupancy rights, then any mortgage would not be callable and there should be no transfer taxes.

Is the owner trying to "kind of sort of" sell the unit creatively? or sell to an unsavory character? I have read of using trusts to assign non-assignable mortgages, but it all amounts to bank fraud if you ask me.

Condo board - as long as the buyer is the beneficiary with occupancy rights, then there is no real sale and no transfer. If that is not the case, then the condo board should scrutinize the beneficiary obtaining occupancy rights, since they will be ultimately be responsible for common charges, etc.

IMHO of course.

Far easier to buy the condo outright and then quitclaim it to the trust. Doubtful a bank will lend to a trust without a personal guaranty anyway.

If you're doing it to protect your assets, it must be an irrevocable trust. LLC might be easier and safer. Ask a lawyer.

gcondo, what you describe would be a related-party transfer. Don't know how a condo board would treat that, but it does happen all the time when people revise their estate planning.

I think skdo23 is talking about having her trustees buy the condo from some unrelated third party. In that case, the trustees hold title and skdo23 would be the occupant. The financial disclosures would probably have to do with the trust and the personal ones to skdo23.

E.g., see 52A at Three Lincoln Center. Trustees bought in 1993 for $954,000 and sold in 2008 for $4,250,000. By then the beneficiary/occupant was either dead or the trustees found somewhere else to park him.

If the trust is funding the purchase (and it's difficult to prove where the money is coming from), I doubt if any condo or coop board will allow the purchase--the boards like to know WHO is living in the unit AND how it will be PAID FOR. Many boards (condo and coop), sellers, and attorneys, will try to negate a trust purchase at first blush out of anxiety (most people don't know how to go about doing it in a trust). If however, you have done estate planning and have put all of your assets into a trust that has you (or you and your wife/partner) as the sole beneficiary (until your death) in that trust, you should be able to make the purchase. Your assumption skdo23 that the board package is more about you as a person and your assets is correct--If your ability to come up with the down-payment, and can you can prove that you can pay the mortgage and maintenance fees (based on your financial standing and the purchase price), it should go through. Also, a lot of boards will say that they don't want to approve a trust for fear of no financing available. Wrong again-I know for a fact that Citigroup will fund a mortgage for a coop or condo in the name of a trust IF the trust is held by the the person (or persons) it lists. You must however meet all the lending requirements as an individual or a couple. I know this because I went through it. We did it in a coop and was approved for a 50% mortgage all in the trust. The coop board was anxious about it (unless we paid ALL cash), but after having the board attorney go through the paperwork, we were approved (an extra $750 was paid to the Board attorney by us). Gay couple here, not married, but we have individual and combined trusts, purchased a coop in prime Lincoln Square. Good luck--It stretched out the process an extra 45 days or so. Oh and PS--we did it in a revocable trust.

stevejhx had mentioned an LLC which is a great idea for personal protection. The downside is in this environment banks will not loan under an LLC and if you do find one that does, the interest rate is ridiculous.

You don't buy under an LLC. You buy it yourself, quitclaim to the LLC as a tax-free capital contribution. The note remains in your personal name.

It does have tax implications, though, that you have to work out.

Your lawyer should be able to help you with this, or our firm does board package consulting for a flat fee:

ali r.
DG Neary Realty
ali [at] dgneary [dot] com