How does Suomma structure legal ownership of the properties?

Our structures for co-ownership is thru a: spanish limited liability company (LLCs) called Sociedad Limitada. With Suomma’s model,  owners see greater protection, tax benefits, and purchasing power.

What is an LLC?

A limited liability company (LLC) is a legal business entity composed of individual members that acts to protect its owners from personal liability. Multiple-member LLCs are a unified front that represent and protect a group of buyers. A blend of partnership and corporation, LLCs have their own bank account, tax ID number and assets, conducting real estate investment and transactions under their own name.

This is the best way for multiple buyers to purchase and own a second home. 

How is an LLC funded?

LLC property ownership is very simple. No matter how many parties form the LLC, the LLC pays for real estate purchases using its own funds, making it very transparent where the ownership lies. When buying with Suomma, buyers are purchasing fractional ownership in a property-specific LLC. 

Advantages of buying thru an LLCs:

Protection: A second home should be easy to keep, but accidents can happen. As a general rule, LLCs offer owners increased protection, containing liability within the LLC rather than placing blame on individual owners. For any claim against a property — a guest slips on the infinity pool deck, a person is hit by a golf ball, or a neighbor gets hurt on your door — your assets are protected with an LLC. This is not the case with other forms of co-ownership. 

Privacy: Privacy has become a priority in this digital age, and LLC property ownership is one of the easiest ways to ensure it. When a home is purchased, the LLC name is recorded on the deed and available to the public, as opposed to the owner’s name being in the public records. 

Reselling: Since an LLC operates as a registered business entity, members can sell their shares of the property to others. The paperwork process is simple and does not require a new deed.

Proven model: The last advantage of LLCs is that they are a known quantity. It’s not uncommon to see homes in a second home market being LLC owned, and they are the most common form of ownership in commercial real estate transactions.

The cons

Contracts: if you were to set an LLC on your own with friends and family it can become very cost and time consuming. Finding a lawyer, understanding regulations to outlining a complex operating agreement, can become a headache. Not wasting time nor money its critical — your rights, responsibilities, and profits depend on it. 

Costs: There are costs associated with forming an LLC and for keeping it in good legal standing.

Suomma takes care of it

Navigating the ins and outs of property ownership can be a complicated process, but Suomma will do the job:

  • We create a property-specific LLC for each home.
  • Suomma has invested hours and resources into consulting together with Bird & Bird to create a best-in-class owner operating agreement and brings like-minded buyers together.
  • Instead of going it alone, owners purchase a membership ownership interest sold in ⅛ shares.  
  • Our managed LLC co-ownership structure allows for a personalized approach, with maximum flexibility to have the operating framework that works best for second-home owners.
  • With this model, transferring ownership interests is easy and secure, a real benefit when you decide to resell. 

Suomma gives you all the benefits of LLC property co-ownership of fully managed second homes. It’s true ownership with less expense and stress, and all the joy.

Related Blog

Sign up to our newsletter and be the first to review our newest properties

    Powered by