We recently received a listing agreement from an agent where the seller was an LLC (Limited Liability Company). There was some confusion with the agent on how and who should sign documents so I thought I would share some tips and tricks. The below applies for Corporate owned properties as well.
1-Always obtain a copy of the LLC documents from the seller to determine who has the authority to sign. Usually this is a manager/CEO who others (if there are other parties in the LLC) may have given permission to sign/make decisions. Occasional, all parties to the Corp or LLC must sign. Confirm this before preparing any document for signature.
2-The name of the person who has authority should be used to sign the documents (not the name of the LLC). If you are not using an addendum to clarify who the signer is, then you will also need to identify their position and the name of the LLC/Corp. Example: Bob Smith, Manager, ABC Holding, LLC. …a lot of text to add to contracts, so it’s much easier to clarify on a separate addenda or disclosure (see number 3).
3-A Representative Capacity Signature Disclosure or Addendum should be used to clarify who the signer is in relationship to the LLC.
4-Be sure to deliver the LLC to your escrow/title officer for review and approval. If you are unfamiliar with identifying the correct signer, the officer is a great resource person and will be happy to help!
The Coordinators at EscrowCoord.com are experts at LLC/Corp sales plus many more! Contact Diana today to find out how we can help create hassle-free transactions!