What happens if a co-owner files for bankruptcy, dies, or divorces?
In a TREC-sponsored commercial co-ownership property, each co-owner holds title within a newly formed, single-member LLC, commonly referred to as a Special Purpose Entity (SPE) that is normally joint and several. Therefore, the property should not be affected. The SPE, approved by the IRS in completing a 1031 exchange, ultimately protects the lender and each of the co-owners.
