Q: If two people formed an LLC, to own a rental property, can one of them choose to sell if the other is unresponsive?
My wife and her friend, who lives in Kenya, created an LLC to purchase a rental property in Memphis. The LLC is listed as the owner on the title document. The friend paid the initial deposit and has been collecting all of the revenue from payments made by tenants. My wife agreed to partner with herfriend because my wife is a US resident and it made it easier for her friend to purchase the property. In the past year, the tenants have vacated the property and the quality of the property has declined to the point where it needs renovation before it can be rented again. The friend lost her job, and is not only unable to pay for the renovation but also unable to make the mortgage payments. My wife, who has received no prior profits, is now making the mortgage payments and has found a buyer who can pay for the renovation. If the property is not sold, it will most likely be condemned. The friend is now unavailable to approve the sale. We need to move forward or stand to lose thousands.
A: If the property is owned by the LLC, the "operating agreement" of the LLC controls resolution of any dispute among the owners/members of the LLC. If there is no "operating agreement," there are state statutes which control the dissolution of the LLC. It is unclear what you mean when you say the friend is "unavailable" to approve the sale- it certainly sounds like you need an experienced real estate lawyer to assist,
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