Q: Selling a real estate LLC. Is seller indemnified personally?
It's a real estate LLC with a portfolio of properties. I am truly unaware of any issues and do not foresee any. It's just my first time selling an LLC.
A:
If the LLC in its entirety is being sold typically the liabilities are transferred with it. However, in most (99.9%) of purchase agreements there are clauses that make the seller liable for any actions up to the date of closing. This means that if the buyer gets sued for something that happened before closing, the seller will potentially be personally liable. Because this sale is for the LLC in its entirety, it will be really important to make clear whether or not the seller will be indemnified on a law suit.
short answer: Make sure it's addressed in the purchase agreement.
A: A question that may come up is whether any of the properties owned by the LLC are collateral for any loans. If so, it is important to review the relevant loan documents to ascertain whether you, as the seller, will remain liable on those loans, as well as whether the lender and any guarantors like HUD or the SBA must approve the transfer of ownership. It is extremely common that such approvals are necessary and the failure to obtain such approvals may constitute a default under the loan documents.
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.
