Owning property in New York comes with exposure: a tenant's guest falls on the stairs, or a dispute becomes a lawsuit. Real estate liability protection means arranging ownership, insurance and paperwork ahead of time, and in the open, so that a claim tied to one property is less likely to reach your home, your savings and your other buildings. This page, part of our asset protection planning practice, explains the tools New York law provides, where each one stops, and how Schwartsman Law Group uses them for New York landlords, small investors and homeowners.

To talk through your situation, call (212) 518-3868 or request a free consultation. We are licensed in New York and work with clients in Manhattan, Brooklyn, Queens, the Bronx, Staten Island and Long Island.

Who This Page Is For

This page is for ordinary owners rather than developers: landlords with one or a few buildings; owners of mixed-use property such as a storefront with apartments above; small investors holding a few condos or houses; families with a home plus rentals; and condo or co-op owners who rent out a unit.

Insurance Comes First

A landlord or commercial general liability policy on each building, with an umbrella policy above it, is usually the first line of protection when someone is hurt on your property. An LLC or trust only decides which assets are exposed if coverage runs out or does not apply. We review your policies before we draft anything.

Holding Rental Property in an LLC

What the LLC shield does

Under LLC Law 609(a), a member or manager of a New York limited liability company is not liable for the company's obligations solely by reason of being a member or manager. If a tenant sues the LLC over an injury at the building, that claim is against the LLC, so your home and savings are not automatically at stake. The limits are in the next section.

Where the shield stops

Your own conduct. An LLC generally does not protect you from liability for negligence or other wrongs you personally commit.
Personal guaranties. A personal guaranty, for example on a commercial mortgage, makes you personally liable for that debt regardless of the LLC.
Veil piercing. New York courts may disregard the entity where the owner exercised complete domination over it with respect to the transaction and used that domination to commit a fraud or wrong against the person suing. Practices that support the shield include separate accounts, no commingling, adequate capital and insurance, a written operating agreement, and contracts signed in the LLC's name.

Forming the LLC properly

Publication (LLC Law 206). Within 120 days after the articles of organization take effect, a New York LLC must publish a notice once a week for six successive weeks in two newspapers designated by the county clerk, then file a Certificate of Publication with the affidavits with the Department of State. If that proof is not filed within 120 days, the LLC's authority to carry on business is suspended until it is filed.
Operating agreement (LLC Law 417). It sets who manages, what happens if a member dies or wants out, and how interests may be transferred.

One property per LLC?

Many investors hold each building in its own LLC so that a claim at one property is less likely to reach the equity in another. That is a common approach, not a legal requirement, and each LLC adds its own formation, publication, bank account and records. The separation is often worth it for several buildings, less so for a single condo. See our guide to structuring a real estate portfolio.

The LLC Transparency Act

New York's LLC Transparency Act (LLC Law 1106 through 1108) took effect January 1, 2026. The statute does not itself say that only LLCs formed abroad are covered; it applies the federal definition of a “reporting company” to LLCs formed or authorized to do business in New York. As of this writing, under current federal rules and New York Department of State guidance, that definition reaches only LLCs formed under the laws of a foreign country that are authorized to do business in New York, so LLCs formed in New York or in other U.S. states and territories do not currently have to report. The law could change, so we check the current rule each time.

Charging orders

If a creditor holds a judgment against you personally, LLC Law 607 allows it to obtain a charging order against your LLC interest, and the creditor generally receives only the rights of an assignee. We do not claim it is a creditor's only remedy in New York or build a plan that depends on it alone.

How the LLC is taxed

As general information, not tax advice: for federal income tax purposes a single-member LLC is by default disregarded as an entity separate from its owner under Treasury Regulation 301.7701-3, and an LLC with two or more members is by default treated as a partnership. See our page on LLCs and partnerships.

Moving an Existing Deed Into an LLC or Trust

The building is not in the LLC until the deed is actually transferred. Before you sign:

Transfer taxes. Tax Law 1405(b)(4) (no consideration) and 1405(b)(6) (mere change of identity or form of ownership), and for city property New York City Administrative Code 11-2106(b)(8), can exempt a transfer where beneficial ownership does not change. A transfer-tax filing is still generally required even when no tax is due.
Your lender. Many mortgages contain a due-on-sale clause that can allow the lender to call the loan if the property is transferred without its consent.
Title insurance. Your owner's title policy may not carry over to the new owner.
Property tax exemptions. Exemptions such as STAR may depend on individual ownership and residence.
Co-op board approval. A transfer of co-op shares to an LLC or trust generally requires the board's approval.

Protecting the Home You Live In

Two New York protections can apply to the home you live in without moving it into an LLC or a trust.

The homestead exemption (CPLR 5206)

Under CPLR 5206(a), an owner-occupied principal residence, including co-op shares and condominiums, is exempt from a money judgment up to a set amount of equity above liens and encumbrances, which the Department of Financial Services adjusts. For Kings, Queens, New York, Bronx, Richmond, Nassau, Suffolk, Rockland, Westchester and Putnam counties, the figure is $204,825 under the adjustment effective April 1, 2024, with the next adjustment scheduled for April 1, 2027. The exemption does not apply to a judgment recovered wholly for the purchase price, and it covers only the home you live in, not rental or investment property.

Tenancy by the entirety for married owners

Under EPTL 6-2.2(b), real property conveyed to spouses is held as tenants by the entirety unless the deed expressly says otherwise, and under EPTL 6-2.2(c) co-op shares and the proprietary lease held by spouses can be held the same way for transfers on or after January 1, 1996. Under New York case law, a creditor of only one spouse may be able to reach that spouse's interest, but while the tenancy continues a sale of that interest generally remains subject to the other spouse's survivorship right; how much protection this gives depends on the facts and can be limited. Debts both spouses owe are not protected, and divorce generally converts the tenancy into a tenancy in common.

Trusts, Real Estate and Your Estate Plan

A revocable trust does not protect assets from the creator's creditors. It is an estate planning tool, not a creditor shield.
A trust for your own benefit generally does not work against creditors. Under EPTL 7-3.1, a trust you create for your own benefit is generally void as against your existing and later creditors, subject to the statute’s exceptions, including qualified retirement arrangements. New York has no domestic asset protection trust statute.
A properly timed irrevocable trust for others can help. A trust for your spouse or children, under terms you generally cannot take back, can hold the LLC interests that own a building. Once the transfer is complete and properly timed, those assets may be out of reach of some future creditors. Medicaid planning follows different rules.

Under EPTL 7-1.18, a lifetime trust is valid only as to assets actually conveyed to it, so the deed or LLC assignment must actually be completed. See our pages on trusts, our guide to irrevocable trusts in New York, and business succession planning.

Timing: New York's Voidable Transaction Rules

The transfers described on this page work only if they are completed before a claim arises. New York's Uniform Voidable Transactions Act, Debtor and Creditor Law Article 10, effective April 4, 2020, lets a creditor undo transfers made with actual intent to hinder, delay or defraud a creditor (DCL 273), and some transfers without proof of bad intent (DCL 273 and 274). Claims that do not require proof of bad intent depend on the circumstances and your financial condition at the time. The creditor generally must prove these claims by a preponderance of the evidence. Under DCL 278, the general deadline is four years after the transfer; for actual-intent claims, the creditor may instead have one year from discovery if that ends later, and certain insider transfers under DCL 274(b) must be challenged within one year after the transfer. A transfer made the month after a tenant's injury invites a challenge; one made while you are solvent and see no claim coming stands on firmer ground. See our guide to asset protection strategies in New York.

What We Will Not Do

No hiding assets. No nominees, undisclosed ownership or offshore secrecy.
No transfers to defeat an existing claim. If a lawsuit, judgment or collection effort is already underway, we will go over the options that remain, but we will not dress up a transfer that a court is likely to undo.
No promises. Insurance, entities, titling and trusts each have limits, and we will tell you where they are.

Property Outside New York

We are licensed in New York only and do not advise on another state's law. For property elsewhere, we coordinate with local counsel there.

How We Work

Inventory. Each property, how it is titled, the mortgage and any personal guaranty, insurance, and any claims or notices.
Entity work. We form or clean up the LLCs, prepare operating agreements, handle publication, and set up practices that support the shield.
Deed transfers. Lender consent, title coverage, transfer-tax filings and exemptions, then the deed.
Home and estate plan. We confirm how your residence is titled and fold the LLC interests into your will or trust, with a review whenever you buy, sell or refinance.

Frequently Asked Questions

Does an LLC protect me from every claim involving my rental property?

No. Under LLC Law 609(a) you are not liable for the LLC's obligations solely because you are a member or manager, but the LLC generally does not protect you from your own negligence, from a personal guaranty you signed, or where a court finds you dominated the company and used it to commit a fraud or wrong.

Do I need a separate LLC for each building?

Not by law. One LLC per building is a common approach because a claim at one property is then less likely to reach the equity in another, but each LLC adds formation, publication, a bank account and records.

Will I owe transfer tax if I deed my building to my own LLC?

Possibly not, but a filing is still generally required. Tax Law 1405(b)(4) and 1405(b)(6), and New York City Administrative Code 11-2106(b)(8) for city property, can exempt a transfer where beneficial ownership does not change. We also check your mortgage, title insurance, exemptions such as STAR and, for a co-op, board approval.

Does my revocable living trust protect my home from lawsuits?

No. A revocable trust does not protect assets from the creator's creditors, and under EPTL 7-3.1 a trust you create for your own benefit is generally void as against your creditors, subject to the statute’s exceptions. For the home you live in, the CPLR 5206 homestead exemption can apply, and if both spouses hold title as tenants by the entirety, that form of ownership can also help, within the limits described above.

Is it too late to protect my property if I have already been sued?

A transfer made after a claim arises can be challenged under Debtor and Creditor Law Article 10, and we will not make one to defeat an existing claim. Insurance, the defense of the case and your existing structure still matter, and we will tell you candidly what remains available.

Do I have to report the owners of my New York LLC under the LLC Transparency Act?

As of this writing, not for an LLC formed in New York. The Act (LLC Law 1106 through 1108) took effect January 1, 2026, and its coverage follows the federal “reporting company” definition, which under current federal rules and New York Department of State guidance reaches only LLCs formed under the laws of a foreign country that are authorized to do business in New York. The law could change, so we confirm the current rule each time.

This page is general information, not legal advice; every situation is different.

Talk to a New York Real Estate Asset Protection Attorney

We can review what you own and tell you plainly what will help and what will not. Call (212) 518-3868 or request a free consultation. We are licensed in New York and work with property owners in Manhattan, Brooklyn, Queens, the Bronx, Staten Island and Long Island.

Real Estate Liability Protection for New York Property Owners