Out-of-State Rental Property in an LLC: The Words “Without More” Are Doing All the Work

Updated August 14, 2026. Quick answer: the advice that you do not have to register an LLC in the state where you own a rental comes from a real clause in real statutes — and the clause says owning, without more. Rent is more. Of the four big landlord states read here, only Florida answers the question in its statute, and it answers it against you: income-producing property is transacting business. Texas uses Florida’s exact words and then stops. California and New York never wrote a property exemption at all.

The clause the advice rests on

Every state’s LLC act carries a list of things a foreign company can do without having to register. Florida’s list runs to 13 items. The last one is the one people quote:

“Owning, without more, real or personal property.”

Fla. Stat. § 605.0905(1)(m)

Read the middle two words. The exemption is for owning and nothing else. It is not an exemption for owning a thing that pays you every month.

Florida answers it, and answers it against you

Florida is the only one of the four that finishes the sentence. Two subsections later, the same statute says:

“The ownership in this state of income-producing real property or tangible personal property, other than property excluded under subsection (1), constitutes transacting business in this state”

Fla. Stat. § 605.0905(3)

That is as direct as statutes get. A Florida rental held in an out-of-state LLC is transacting business in Florida, so the registration requirement bites:

“A foreign limited liability company may not transact business in this state until it obtains a certificate of authority from the department.”

Fla. Stat. § 605.0902(1)

Texas uses the identical words and stops

Texas’s list is the longest of the four at 16 items, and item fifteen is Florida’s clause almost word for word:

“owning, without more, real or personal property in this state”

Tex. Bus. Orgs. Code § 9.251(15) (read from an archived capture, 2025-11-19)

What Texas does not have is Florida’s second sentence. Chapter 9 of the Business Organizations Code contains zero occurrences of “income-producing”, “rental” or “lease”. So Texas exempts bare ownership, says nothing about rent, and leaves “without more” to carry the whole question. That is not the same as Texas saying no.

California and New York never wrote the exemption

California’s list has 10 items and not one of them is about owning property. There is no clause to rely on, so a landlord falls to the general test:

“A foreign limited liability company that enters into repeated and successive transactions of business in this state, other than in interstate or foreign commerce, is considered to be transacting intrastate business in this state”

Cal. Corp. Code § 17708.03(a)

Collecting rent month after month, renewing leases, replacing tenants — a reader can see for themselves which side of “repeated and successive” that sits on. New York is narrower still. Its entire list is 4 items:

“(1) maintaining or defending any action or proceeding, whether judicial, administrative, arbitrative or otherwise or effecting settlement thereof or the settlement of claims or disputes; (2) holding meetings of its members or managers; (3) maintaining bank accounts; or (4) maintaining offices or agencies only for the transfer, exchange and registration of its membership interests or appointing and maintaining depositaries with relation to its membership interests.”

N.Y. Ltd. Liab. Co. Law § 803(a) (read from an archived capture, 2024 capture (nysenate.gov 403s to this environment))

Litigation, meetings, bank accounts, securities paperwork. Property is not on it.

What it costs to have got this wrong

The penalties are not the same shape in any two states, and in one of them the penalty is not even in the LLC act.

“civil penalty of at least $500 but not more than $1,000 for each year or part thereof during which it transacts business in this state without a certificate of authority”

Fla. Stat. § 605.0904(7)

Note or part thereof: a rental bought in November is a full year. Three calendar years of a Florida rental runs $1,500 to $3,000 before back fees. California is the trap, because the number is nowhere near the Corporations Code:

“The Franchise Tax Board shall impose a penalty of two thousand dollars ($2,000) per taxable year whenever an entity described in paragraph (2) is doing business in this state”

Cal. Rev. & Tax. Code § 19135(a)

$2,000 a taxable year, imposed by the Franchise Tax Board — $6,000 over three years. Texas prices it as a multiple instead of a flat sum:

“The amount of the late filing fee is an amount equal to the product of the amount of the registration fee for the foreign filing entity multiplied by the number of calendar years”

Tex. Bus. Orgs. Code § 9.054(b) (read from an archived capture, 2025-11-19)

The registration fee times the number of calendar years you should have been registered. This page does not print a Texas dollar figure, because the fee itself was not read at primary here.

The part that actually bites: the courthouse door

All four states attach the same non-monetary consequence, and for a landlord it is worse than the fine, because it lands on the day you need to evict someone.

“A foreign limited liability company transacting business in this state or its successors may not maintain an action or proceeding in this state unless it has a certificate of authority to transact business in this state.”

Fla. Stat. § 605.0904(1)

“A foreign limited liability company transacting intrastate business in this state shall not maintain an action or proceeding in this state unless it has a certificate of registration to transact intrastate business in this state.”

Cal. Corp. Code § 17708.07(a)

Texas and New York carry the same bar. The registration is generally curable — you register late, pay, and proceed — but you cure it on the court’s timetable, in the middle of the dispute you were trying to win.

The second bill nobody prices

Registering in the property state is not a form. It is a registered agent in that state, that state’s annual report, and that state’s fees, every year, on top of your home state’s. That is the same arithmetic that makes forming in Delaware a false economy, and the five-year numbers are on the cost table. Whether the property should be in an LLC at all is a different question with a bigger answer — the mortgage part everyone skips — and the recurring filings are here.

What this page does not do

• It reads four states, not fifty-one. Florida, Texas, California and New York were read at primary. The other 47 jurisdictions were not, and nothing here should be read across to them.
• It does not tell you the answer in Texas, California or New York. It tells you those statutes do not contain the answer, which is a different and more useful thing to know before you rely on a video that says they do.
• It does not cover state income or franchise tax. Registration and taxation are separate questions with separate triggers, and a state can tax a landlord it does not require to register.
• No Texas dollar figure appears because the Texas registration fee was not read at primary in this pass; the statute’s formula is quoted instead.
• Texas statutory text is read from an archived capture of the state’s own site, because the live site now serves a JavaScript shell with no statute in it. The capture date is on every Texas row below.

Sources

Every figure on this page is computed from the text quoted below, as read on August 14, 2026. Each row links the document it was read from.

General consumer information, not financial, tax or legal advice. State rules are as published by the cited source on 2026-08-14 and change; your own facts govern, and a registration or reinstatement question with money on it is one to put to a lawyer or accountant in that state.