Shrewd real estate investors in a land trust to be a powerful tool to foster their investment interests. Land trusts are usually revocable and live trusts particularly used in the holding of titles in real estate business. Separate trusts are titled to each property, giving room for the highest level of protection and privacy.
The lucrativeness of the land trusts is dependent on individual’s consideration. Where others perceive them as a way to invest in real estate, others are skeptical with the setbacks associated with using land trusts. The opt for or against land trusts requires thorough research and understanding of the dynamics of operation of them. Proper knowledge is integral. Otherwise, one may end up investing in the deception of a promising return.
Reasons to use Land Trusts
Privacy is one of the factors that individuals can consider before going for land trusts for real estate investment. Land trusts in Arizona assure the member’s ultimate privacy in that, the names are secret and cannot be accessed by unauthorized parties. Under the land trust arrangement for the real estate investment, the city code enforcement is denied access to knowledge of the owner. The reason behind the secrecy is because trust agreements are not put out for the members of the public to access. At the same time, the real estate that is under the title of real estate is not subjective to liens contrary to the recipient of the trust hence protection from the liens.
Also, to privacy and protection from liens, land trusts discourage litigation. In many cases, people tend to sue those who appear to have money since it is possible to make them cough a good amount of it when putting to an edge that results in the collection. Making it hard for the investment on properties hard to find makes the investor look broke. In that case, the predators who count on litigation perceive you as broke when using a land trust. The same protection is extended against HOA claims. For instance, instead of buying a condo with the owner’s name on the title, it is better to take the title to the trust which will become the only resource to be used by homeowner’s association’s debts.
Land trust Setbacks in Arizona
Despite the privacy and protection, there is not state stature that guarantees the protection. According to A.R.S 33 404, interest in property that is under a land trust can be made to disclose the name and address of the beneficiary. At the same time, conveyance of real estate property that dies includes disclosing as per the statue of the state or an interest in a real estate, the conveyed is voidable by the next party to the conveyance.
Additionally, not unless the payment is made in cash, one is required by the lender to sign a deed of trust where the data will be put in the county records. Since it is the individual who does the signing, therefore the name will appear in the deed of trust. The sense derived here is that the land trust requires non-disclosure of the name and address while on the other hand, the state law calls for disclosure.
In conclusion, for those in Arizona and are interested in land trust, they should tread carefully. The deception given by the advantages associated with investment in real estate is not at the expense of the state laws. One has to whether they can stomach the setbacks when they set in. Otherwise, one may ride in the optimism and find themselves losing their property under the trust laws of Arizona state.