Your LLC is not required to have an Operating Agreement to complete a real estate transaction. If no Operating Agreement exists, then the attorney closing your transaction will need to speak with you about the ownership structure, membership, and management of the LLC. The attorney will need to check the state’s website where your LLC was formed to confirm the membership and management. In addition, an LLC affidavit will need to be drafted that specifically states no Operating Agreement exists and a Resolution will need to be drafted and signed by all members/managers that confirms who has signing authority.
Real estate transactions involving LLCs are often smoother when there is an up-to-date Operating Agreement, especially if the LLC is the seller. An Operating Agreement can address the management of the LLC, powers of the managers and members for selling or buying real estate, ownership interest, and indicate who has signing authority. The Operating Agreement can make it clear to the closer, whether that be an attorney or title company, who has authority to sign and what is needed to convey the property.
I have had seller-side closings where the seller is an LLC, does not have an Operating Agreement, and the owner of the LLC cannot remember who the other owners, members, or managers are because the LLC is old, and the owner has many entities. I have had to spend time researching entities, speaking with attorneys and accountants affiliated with the entity to determine ownership, which caused the clients to spend extra funds. If the clients had an up-to-date Operating Agreement, they would not have had so much trouble selling their property.
It is recommended that you have an Operating Agreement for your LLC if it owns real estate. Operating Agreements are not expensive to draft, and they can save you and your business time and money.