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Who Can Execute a Sales Contract for a LLC: An Agent’s Guide

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Your open house goes off fabulously. You market the heck out of the property. Countless showings are conducted. Finally, your hard work pays off – the clouds part, the skies open, streamers rain down from the heavens and a buyer appears. Hours later an offer appears in your in-box – full price! Once you get past the price point, you scroll down to the buyer section and see the name of an LLC. Who is this LLC and how do you even know if the right person is authorized to sign for the LLC? Said another way, how do you advise your client whether the signature on behalf of the LLC is worth pulling the property off the market?

Tying up a seller’s property with an ineffective contract that stops the momentum of an agent’s listing is not a good result for all that hard work. How does one know if the right person signed? Below is a brief guide to point out basic due diligence to be conducted before handing it off to your favorite real estate attorney.

There are several different types of entities in Florida; partnerships, corporations, and limited liability companies are just a few. A limited liability company (LLC) is the most prevalent these days. Here are some useful tips for those instances when you encounter a LLC in real estate transactions, and helpful information on how to do your homework before tying up your listing.

Limited Liability Company
• Will be registered with the Florida Department of State, Division of Corporations, so you can find out
• if the LLC is registered and in good standing by performing a basic search of the LLC name on
• On the information page, there will be information about the Registered Agent, the Managers, and Authorized Members of the LLC. This is a good start.
• To know the answer to question posed above as to “who is the right person to sign the contract?” we have to first know the answer to the following question: Who manages the LLC?
o Member Managed: In a member managed LLC, any one of the members can bind the LLC and sign on behalf of the LLC.
o Manager Managed: In a manager managed LLC, the day-to-day operations have been delegated to one or more of the members or a non-member – the Manager.
Here, the Manager, and not the members, are authorized and can execute contracts on behalf of the LLC. Said another way, the members appoint the Manager and the Manager runs the business.

It can be confusing when the buyer is an entity, and not an individual. Don’t let the uncertainty surrounding the signature on your contract overwhelm you. Peace of mind may be obtained through a simple online search and a simple document request to confirm the right person signs the contract. Reviewing LLC operating agreements can be more arduous, and no one expects you to act as an attorney; in fact, you shouldn’t. A good practice would be to submit the LLC operating agreement, with the real estate contract, to your favorite closing attorney, so s/he can review and immediately confirm that the correct party executed the contract.

At Berlin Patten Ebling, we are happy to help you convert your real estate sales contract into a successful closing. Please feel free to reach out to our attorneys with any questions you may have.

Berlin Patten Ebling, PLLC

Article Authored by Kelly Roberts, Esq.

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.

All rights reserved. This copyrighted material may not be re-published without permission. Links are encouraged.

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