Skip to main content

The Side Benefits to Using a Land Trust
By: Mr. Land Trust®, Randy Hughes

There are few (if any) benefits to owning investment real estate in your own name. There are many reasons NOT to own investment real estate in your personal name. Here is a real life case in point.

I control ten condominiums (in one complex) via ten separate Land Trusts. Each property is held in a separate Land Trust with the beneficiary of each Trust being a Limited Liability Company. All ten units are rented out to tenants.

Every now-and-then trouble would arise at this complex and the tenants would start arguing with each other which oftentimes resulted in the police getting involved. Upon further investigation I found that one of my tenants was always at the center of the trouble. In fact, it appeared that she was the source of all discontent!

When it came time to renew the leases at my complex I decided not to renew Ms. Troublemaker’s lease. She had rented from me for years and was VERY unhappy that we were “kicking her out.” Of course, she wanted an explanation as to why I was not renewing her lease and I simple told her that the “owner” (the Trustee of the Land Trust) was not happy with her involvement with the other tenants and therefore, her lease would not be renewed.

Well, this explanation was not good enough for Ms. Troublemaker. A few days after my conversation with Ms. T. I received a call from my attorney’s secretary (my attorney was serving as my Trustee). The secretary said there was a lady at their office demanding to speak to the “owner” of the property she lived in.

Ms. Troublemaker had gone online to the local recorder’s office website and determined who the owner of record was for her condo. Then, she looked the owner up in the phone book and stormed down to his office to demand an explanation of why her lease was not renewed!

My attorney’s secretary told Ms. Troublemaker to “take a hike” and she never did have a conversation with my attorney. Can you imagine someone having the nerve to do this? Yes, I can.

If you read between the lines of this scenario you can see the many benefits to not being the “owner” of record. As the property manager, I was just doing my job to not renew Ms. Troublemaker’s lease. I could not be held accountable. As the Trustee of the Land Trust, my attorney was just doing his job in representing the Beneficiary’s instructions to not renew the lease. And, since the Beneficiary of a Land Trust is not public information, Ms. Troublemaker was checkmated!

Ms. Troublemaker had no choice but to move out peacefully and I have not heard from her since. Incidentally, there has been peace at the condo complex ever since she moved out.

Find me on Facebook: landtrustsmadesimple or Twitter – @mrlandtrust.

Leave a Reply