Loveland, CO asked in Real Estate Law for Tennessee

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.

Related Topics:
1 Lawyer Answer
Leonard Robert Grefseng
Leonard Robert Grefseng
  • Columbia, TN
  • Licensed in Tennessee

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,

Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.

The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.

Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.