Our firm often works with individuals who invest in rental properties. Sometimes, it is advisable to transfer the client’s interest in the rental property into a trust.

When discussing your rental property(ies) with your attorney, it is important to provide your attorney with the address of the rental property, the number of units at the rental property, the latest tax bill for the rental property, and the property and casualty insurance for the rental property.

When transferring rental property into a trust, there are several things to consider:

1. All lease agreements for each rental unit must be reviewed prior to transferring the rental property into a trust to make sure that an assignment of each lease to the trust is not prohibited;
2. Once it is determined that the lease agreement(s) can be assigned to your trust, you can transfer the title of the rental property to the trust as well as assign all leases to your trust;
3. Under New York law, a landlord is required to complete the following within five (5) days of the transfer of the title of the rental property:
   • Notify each tenant that there has been a transfer of ownership in the property
     • This notification shall include the name and address of the new owner (e.g. your trustee’s name and contact information should be included in the notification); and
     • This notification must be sent either by registered or certified mail to each tenant.
   • The security deposit(s) should be transferred to an account in the name of your trust
     • The trustee must provide each tenant with written notice of the name of the banking institution where the security deposit is located, the address of said banking institution, and the total amount of the tenant’s security deposit that is deposited into the account
     • It should be noted that if your rental property located in New York State has six (6) or more units, your trustee must deposit the security deposit(s) into an interest-bearing account
   • Once the property is transferred into the trust, the property and casualty insurance provider must be notified about the transfer and the policy should be updated accordingly.

The attorneys at Russo Law Group are available to assist you with the transfer of your rental property into a trust as well as the review of your lease agreements, the assignments of lease agreements, and the notification to tenants of the change of ownership as part of your overall estate plan.