On June 14, 2013, the Florida Revised Limited Liability Company Act (“New Act”) was signed into law. The New Act became effective January 1, 2014, with prior LLCs getting a grace period to comply with the New Act. Effective January 1, 2015, the grace period has ended and the New Act applies to all Florida limited liability companies.
So what does this mean for you when you have a Florida LLC selling or buying property? Most importantly, the New Act eliminated the term “Managing Member” because it caused confusion whether the LLC was managed by a manager or a member. Under the New Act, the LLC is either manager-managed or member-managed. For LLCs created prior to 2014 that used the term managing member in the articles of organization and/or operating agreement will be deemed member-managed.
If the LLC is manager-managed, then all managers of the LLC have apparent authority with members having no authority to bind the LLC. You would use the following as your signature block in your documents:
Green Acres, LLC
In contrast, if the LLC is member-managed, then every member of the LLC would have apparent authority to bind the LLC and following signature block would be used:
Green Acres, LLC
Its: Authorized Member
Another important change, the New Act allows the LLC to file a Statement of Authority with Florida Secretary of State’s office and record a certified copy in the Public Records of the applicable county where the property is located. The Statement of Authority provides who can sign on behalf of the LLC and can be relied on by third parties without looking further. In addition, the parties named in the Statement of Authority do not have to be members or managers of the LLC.
The aforementioned is just a brief overview of how the New Act impacts real estate transactions. Please consult with your attorney if you have any questions concerning whether a particular party has authority to bind the LLC before having the document signed. Likewise, anyone with a Florida LLC formed prior to 2014 should contact their attorney to have their LLC documents reviewed in light of the New Act. If you have any questions regarding the foregoing, we urge you to consult with your real estate attorney.
Berlin Patten Ebling, PLLC
This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.
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