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Rental property LLCs in North Dakota

Yes, you can hold a North Dakota rental in an LLC. You file Articles of Organization with the Secretary of State for $135, and the LLC files a $50 annual report every year, due November 15. North Dakota's LLC Act authorizes series LLCs, and the deed carries a North Dakota-specific step: the recorder can't record it unless the grantee certifies the full consideration paid or cites an exemption. Forming the LLC doesn't move your deed, and it doesn't stop a lender's due-on-sale clause.

Last checked 2026-10-25. General information, not legal or tax advice.

Local rental rules come first

North Dakota bars rent control: a political subdivision "may not enact, maintain, or enforce an ordinance or resolution that would have the effect of controlling the amount of rent" for private residential or commercial property (N.D.C.C. § 47-16-02.1). Inspections, licenses and short-term rental permits are local.

Fargo. The Inspections Department requires inspections of rental properties and asks owners to "ensure that your rental is recorded with" the department, at no cost. Inspection requests go by letter to the mailing address on the Cass County property tax records, so keep that address current when the deed moves (city Rental Housing Inspections page). The initial inspection and first re-inspection are free; the second and later re-inspections cost $150 each (fee schedule effective July 7, 2025). An owner who ignores requests or doesn't fix violations can be charged fees or referred to the City Attorney. I found no Fargo short-term rental permit on the city's site, and the page doesn't say what happens to a rental's record at a change of owner, so tell Inspections when your LLC takes title.

West Fargo. Short-term rentals need an annual city license (Ordinance 1254), valid July 1 to June 30, with a $150 application fee prorated by month and a $65 Safety and Compliance Inspection fee. The application requires proof of ownership, operation or tenancy, proof of liability insurance and proof of a North Dakota sales and use tax permit, and licensees must carry at least $500,000 of general liability insurance. The license "is not transferable," and "A new license is required upon change of ownership, operation, or tenancy of the licensed premises," so a deed to your LLC means a new license (city Short-Term Rentals page).

Bismarck. Chapter 4-11 of the city's building ordinance sets minimum rental housing standards for all rental housing in the city and its extraterritorial area, enforced on a written complaint from a party to the rental agreement or its agent (city Title 4). I found no landlord registry or rental license in it. For short-term rentals, the city's planning FAQ says any housing unit may be rented short-term, and that the city "may institute regulation if the need arises."

Grand Forks. The Rental Inspection Program inspects every rental unit about every five years or on complaint, and a rental is any dwelling unit "having any portion of the housing unit occupied by someone other than the owner of the property or their family" (city program page). A Certificate of Occupancy is required before anyone other than the owner or family lives in a unit, and one- and two-family rentals also need a rental license, renewed yearly. The city says it enforces the program by "citing property owners in municipal court for non-compliance" or requiring the unit to stay vacant (city Building Safety FAQ). I found no Grand Forks short-term rental permit on the pages I read, and none says whether a license or certificate carries over to a new owner, so ask the Inspections Department before you deed.

Elsewhere. Rental rules are local. Ask your city or county before the first lease, and see the lodging tax below if you rent short-term.

What the LLC protects, and what it doesn't

North Dakota's LLC Act says an LLC's debts "do not become the debts, obligations, or other liabilities of a member, manager, or governor solely by reason of the member acting as a member, manager acting as a manager, or governor acting as a governor" (N.D.C.C. § 10-32.1-26(1)). Skipping formalities "relating exclusively to the management of its internal affairs" isn't a ground for liability, but the case law on piercing a corporate veil also applies to LLCs (§ 10-32.1-26(2), (3)).

  • Guarantees still bind you. A personal guarantee you sign for a lender is your own promise.
  • Your own acts are yours. The statute protects against liability arising "solely by reason of" acting as a member or manager; ask a North Dakota attorney about your own negligence.
  • Keep the money separate. Because veil-piercing law applies, run rent and expenses through the LLC's own account.
  • A personal creditor reaches distributions, not the building. A judgment creditor of a member can get a charging order, which the statute calls the "exclusive remedy," and "No creditor of a member or transferee has any right to obtain possession of" company property. This applies to single-member LLCs too (§ 10-32.1-45(6), (7)). Ask a North Dakota attorney how it applies to you.
  • It isn't insurance. The LLC still needs coverage that pays claims and defense costs.

One LLC, or one per property?

Separate LLCs keep one property's judgment away from the others, at $135 plus $50 a year and a registered agent each. North Dakota's LLC Act also authorizes series: an operating agreement "may establish or provide for the establishment of a designated series" with separate rights and duties over specified property, and a series' debts "are enforceable against the assets of the series only," not the company's other assets or a member (§ 10-32.1-102(1), (3)). The wall holds if the series' asset records are kept separately, or the operating agreement specifically provides for it, or the articles give notice of it (§ 10-32.1-102(4)). A series may hold title to real property in its own name (§ 10-32.1-102(6)), but the statute excludes LLCs under the farm, professional and nonprofit chapters (§ 10-32.1-102(1)). The Secretary of State's LLC page doesn't mention series and I did not research North Dakota case law, so ask your lender, your title company and a North Dakota attorney before you put several properties in one. More: Should you have a separate LLC for each rental property?. Other states: Minnesota · Colorado · Illinois · all state guides.

Form it where the property is, or register there

The simplest setup is a North Dakota LLC for North Dakota property. If you already have an LLC from another state, the act says "the ownership in this state of income-producing real property" counts as transacting business (§ 10-32.1-82(2)), and a foreign LLC may not transact business here until it has a certificate of authority (§ 10-32.1-74(1)). The application costs $135 and needs a certificate of good standing or existence from your home state and a North Dakota registered agent (§§ 10-32.1-75, 10-32.1-92(20); Secretary of State LLC page). Skipping it doesn't void your leases, and a member isn't liable for the company's debts solely for that reason (§ 10-32.1-84(2), (3)). But the LLC can't "maintain an action or proceeding" in North Dakota until it registers, which matters if you ever sue a tenant. The Secretary of State becomes its agent for service of process, and the LLC faces a civil penalty of up to $5,000, with up to $1,000 for each governor, member or agent who authorizes the business (§ 10-32.1-84(1), (4), (5)). A registered foreign LLC files the same $50 annual report; its first is due before November 16 of the year after the certificate issues (§ 10-32.1-89(3)).

What it costs the state

  • Articles of Organization: $135 (N.D.C.C. § 10-32.1-92(1); Secretary of State LLC page)
  • Annual report: $50, due each November 15, first one the year after formation (§§ 10-32.1-92(25), 10-32.1-89(3); Secretary of State LLC page)
  • Late annual report: an additional $50 after the deadline (§ 10-32.1-92(25)(a)(1))
  • Reinstatement after termination: $135, plus the past-due report and its fees (§§ 10-32.1-92(25)(a)(2), 10-32.1-91(1)(a))
  • Name reservation (optional): $10 (§ 10-32.1-92(11))
  • Statement of authority (optional): $20 (§ 10-32.1-92(5))
  • Foreign LLC certificate of authority: $135 (§ 10-32.1-92(20))
  • Corporation income tax: only if the LLC is treated as a corporation for federal tax (§§ 57-38-07.1, 57-38-07.2)
  • EIN: free from the IRS

Compare services: LLC services compared.

Forming the LLC, in order

  1. Pick a name that contains "limited liability company," "L.L.C." or "LLC" and is distinguishable from names already on the Secretary of State's records (§ 10-32.1-11(1)).
  2. Name a registered agent: a commercial registered agent, or a noncommercial agent with a North Dakota address (§§ 10-32.1-16, 10-32.1-20(2)).
  3. File Articles of Organization with the Secretary of State ($135). They state the name, the agent, the principal executive office and each organizer, and the LLC is formed when they're filed, or on a later date up to 90 days out (§ 10-32.1-20).
  4. Write an operating agreement. The statute counts oral and implied agreements (§ 10-32.1-02(36)); put yours in writing anyway.
  5. Get an EIN and open the LLC's bank account.
  6. Put the LLC's name and address in every lease, and move each tenant's security deposit into the LLC (see below).
  7. Get the city registration or licenses, and a sales and use tax permit if you rent short-term.
  8. Optional: file a statement of authority ($20) naming who may sign deeds for the LLC. A grant of authority to transfer real property is conclusive in favor of a person who gives value in reliance on it without knowledge to the contrary (§ 10-32.1-24(1), (6)).

Forming the LLC doesn't move your deed

Putting your rental in the LLC takes a new deed, presented to the county recorder (§ 11-18-02.2(1)). Cass County's recorder pages are the model here; other counties may differ.

  • The grantee signs a statement on the deed. The grantee or its agent must certify on the face of the deed either "the full consideration paid" or one of the statute's exemptions, and the recorder may not record a deed without one (§ 11-18-02.2(1), (3)). The exemptions include a sale where "the grantor and the grantee are of the same family or corporate affiliate, if known," and a transfer "for which is given a quitclaim deed" (§ 11-18-02.2(6)(c), (h)). Whether a deed from you to your own LLC fits either one is a question for your attorney and the recorder. Willfully falsifying the consideration is a class B misdemeanor (§ 11-18-02.2(7)). Cass County says only one of the two statements will be accepted on a deed.
  • Taxes must be paid first. The recorder must refuse a deed unless it carries a county auditor's certificate that the transfer is entered and that "delinquent and current taxes and delinquent and current special assessments" on the land are paid (§ 11-18-02). Cass County's recorder says all property taxes must be paid in full before a deed can be transferred.
  • The recording fee is $20 for a deed of one to six pages, and $65 for more than six, plus $3 for each page after the first twenty-five, with $10 more if the margins don't conform (§ 11-18-05(1)(a), (d); Cass County Recorder fees). The first page needs a three-inch blank space across the top.
  • I found no transfer tax or deed tax. The recorder-fee statute and Cass County's recorder pages list recording fees and the statements above, not a tax on the transfer. Ask your county recorder what else is due before you sign.
  • Move the security deposits. A landlord must hold a deposit, limited to one month's rent with narrow exceptions, in a federally insured interest-bearing account for the tenant. On "a transfer in ownership," the deposit and accrued interest "shall be transferred to the grantee," and the grantor isn't relieved until that happens (§ 47-16-07.1(1), (5)).
  • Farm and ranch land is different. North Dakota prohibits LLCs from "owning or leasing farmland or ranchland" except as chapter 10-06.1 allows, and defines the term as "agricultural land in this state used for farming or ranching" (§§ 10-06.1-02(1), 10-06.1-01(10)). If your rental is agricultural land, talk to a North Dakota attorney before you deed it.

Have a North Dakota attorney prepare the deed and choose the consideration statement. After it records, update leases, rent payment instructions and insurance, and re-apply for any city license that doesn't carry over.

Check the mortgage before you transfer

Federal law lets a lender enforce a due-on-sale clause, and a transfer to an LLC isn't one of the exceptions for 1–4 unit homes (12 U.S.C. § 1701j-3(d)). Fannie Mae allows a transfer to an LLC the borrower controls for loans it acquired on or after June 1, 2016 (Fannie Mae Servicing Guide D1-4.1-02). Ask your servicer in writing.

Insurance and taxes

Tell your insurer before title moves. For federal income tax, a single-member LLC is disregarded unless it elects corporate treatment (IRS). North Dakota follows: a single-member LLC not treated as a corporation federally "is disregarded as an entity separate from its owner for state tax purposes" (§ 57-38-07.2), and a multi-member LLC taxed as a partnership federally is a partnership for state purposes (§ 57-38-07.1).

  • Short-term rentals owe sales tax. The Tax Commissioner says "Renting a house, apartment, a portion of a home, or a room in a home for less than 30 days is a taxable lodging rental." The seller needs a sales and use tax permit and must collect and remit the tax, unless its contract with a lodging marketplace makes the marketplace responsible. City lodging and restaurant taxes are charged on top where they apply, and a stay of 30 or more consecutive days by the same individual is exempt (Tax Commissioner lodging guideline). The state rate is 5% for most retail sales, and permits can't be transferred, so ask the Tax Commissioner whose name the permit goes in once the LLC owns the rental (Tax Commissioner sales tax page).
  • Your own home in an LLC. The primary residence credit, up to $1,600 against property tax (§ 57-02-08.9), goes to a "primary residence" the statute defines as "Owned by one or more individuals, either directly or through a beneficial interest in a qualifying trust" and occupied by an owner (§ 57-02-01.2(6)). An LLC isn't on that list, so ask the county or the Tax Commissioner before you deed a home you live in. A rental you don't occupy doesn't meet the definition.

Keeping each LLC in good standing

  • The annual report must reach the Secretary of State before November 16 each year, which the office's page gives as November 15. It lists the registered office and agent, the principal executive office, a brief statement of the business, and the names and addresses of the managers and governors or managing members (§ 10-32.1-89(1), (3)). The first is due in the year after the year of the effective date in your articles.
  • Miss the deadline and the fee goes up by $50. If the LLC doesn't file the report and fees within six months after the deadline, it "ceases to exist and is considered involuntarily terminated by operation of law" (§ 10-32.1-90(1)(b)). Reinstatement within one year takes the past-due report, its fees and the $135 reinstatement fee, and after a year it takes a petition to the district court serving Burleigh County (§ 10-32.1-91(1)(a), (b)). Reinstatement validates acts within the articles' authority and restores the LLC's assets and rights (§ 10-32.1-91(1)(c)). With a mortgaged building inside the LLC, ask your lender what the loan says about a terminated borrower.
  • Keep the registered agent current: failing to maintain one is also a ground for termination (§ 10-32.1-90(1)(a)).
  • Renew city paperwork on its own clock: Grand Forks rental licenses yearly, and West Fargo short-term licenses expire June 30, with renewal opening 90 days before.
  • File sales and use tax returns on the monthly, quarterly or annual schedule set when you apply for the permit.

Before you file or transfer a property

  • Attorney: the deed, the consideration statement or exemption, whether to use a series, any farmland
  • Servicer: is the transfer allowed?
  • Insurance agent: named insured, coverage
  • County recorder and auditor: current taxes paid, the auditor's certificate, recording fee
  • Tax Commissioner and CPA: sales tax permit for short-term rentals, income tax, the primary residence credit
  • City: rental registration or license, and any short-term rental license, in the LLC's name
  • Calendar: November 15 annual report; city renewals

Form it with Corpus

Corpus prepares and files your Articles of Organization and includes the first year of registered-agent service. The North Dakota page shows the current price. Corpus isn't a law firm: the deed, the loan, taxes and city permits are separate steps.

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Sources

Last checked 2026-10-25. Corpus is not a law firm and does not provide legal or tax advice.