Laws, Regulations & Annotations

C

220.0000 CHANGE IN OWNERSHIP

Annotation 220.0252

220.0252 Holding Agreements. A limited liability company (LLC) owned real property. The LLC entered into a holding agreement with one of its members that legal title to the property would be conveyed to the member solely for the purpose of refinancing the loan on the property and that upon completion of the refinance, the member was to immediately reconvey the property back to the LLC. Subsequently, the LLC transferred the property to the member and his wife as joint tenants. Upon completion of the refinance, another grant deed was prepared to reconvey the property from the member and his wife back to the LLC.

Under Property Tax Rule 462.200, the owner of legal title is presumed to also be the owner of beneficial title to the property. This deed presumption may be rebutted by clear and convincing evidence. The holding agreement constitutes clear and convincing evidence, in conformity with the requirements of Rule 462.200(c), of a rebuttal to the deed presumption, such that the transfers from LLC to the member and back to the LLC are not changes in ownership. However, when husband and wife take title to property as joint tenants, the ownership interest of a spouse is the separate property of the spouse. Therefore, in the absence of any documents that constitute clear and convincing evidence that at all times wife was also subject to the terms of a holding agreement and permitted to hold record title only and that all beneficial use and control remained in LLC, a reassessable change in ownership occurred as to wife's 50 percent ownership of the property, and will occur again if she transfers the property back to LLC. C 3/12/2013.