# entity-authorization-requirements.yaml # Requirements for entity authorization to convey real property, organized by entity type. # State-specific requirements are noted where they materially deviate from the general rule. # Verify current requirements with local counsel before closing -- state law changes frequently. meta: last_reviewed: "2025-08-01" jurisdiction_coverage: "U.S. domestic entities only; foreign entities require additional analysis" disclaimer: "Reference guide only; not legal advice; confirm with local counsel" # ============================================================================= # ENTITY TYPES # ============================================================================= entity_types: # --------------------------------------------------------------------------- # LIMITED LIABILITY COMPANY (LLC) # --------------------------------------------------------------------------- llc: overview: | Authorization to convey depends on management structure (manager-managed vs. member-managed) and the consent threshold in the operating agreement. Most institutional LLCs are manager-managed. manager_managed: default_authority: "Manager(s) have authority to convey without member vote unless operating agreement restricts" operating_agreement_review: - "Check for provisions requiring member vote or consent for sale of 'substantially all assets'" - "Check for provisions making sale a 'major decision' requiring supermajority or unanimous consent" - "Check for provisions giving specific members veto rights over dispositions" resolution_requirements: base_elements: - "Name and state of formation of LLC" - "Date of action (meeting or written consent)" - "Recital that manager has authority under operating agreement (cite section)" - "Description of transaction: property address, buyer, purchase price" - "Authorization of named signatory and title" - "Certification by manager or authorized officer" - "Signature of manager(s)" notarization: "Not required by most states for LLC resolution; required by some title companies or states for deed execution by entity" witnesses: "Not typically required for resolution; required in FL, GA, SC for deeds" good_standing: required_from: "State of formation" foreign_qualification: "If LLC holds property in a different state and is foreign-qualified there, obtain good standing from both" timing: "Order at least 10 business days before closing; update certificate if issued more than 30 days before closing" member_managed: default_authority: "Each member has authority to bind LLC as agent; consent threshold per operating agreement" resolution_requirements: additional_elements: - "Member vote consent documentation (meeting minutes or written consent)" - "Confirmation that consent threshold met: majority-in-interest (default) or higher if operating agreement specifies" - "List of consenting members with ownership percentages" - "Signature of all consenting members (or a quorum if meeting-based)" multi_member_considerations: unanimous_consent_clause: risk: "HIGH -- if one member is unreachable, transaction cannot close" remedies: - "Power of attorney granted by absent member (must be in writing, notarized)" - "Prior written consent (check if operating agreement permits pre-authorization)" - "Court order if member is incapacitated or deceased" - "Buyout of dissenting/absent member interest (requires separate negotiation)" right_of_first_refusal: check: "Does any member or third party have ROFR on sale of property or on member interests?" remedy: "Send ROFR notice and obtain written waiver or confirm expiration before PSA execution" consent_of_lender: check: "Does any existing financing encumbering the property require lender consent to sale?" remedy: "Obtain lender consent or coordinate payoff/assumption with sale" single_member_llc: authority: "Sole member has full authority; no consent threshold issue" piercing_risk: "Courts may disregard single-member LLC if not properly maintained; confirm separate accounts, annual filings, and no commingling" resolution: "Sole member resolution is straightforward; include member's entity authorization if member is itself an entity" state_specific: delaware: notes: "Delaware LLC Act Section 18-402: manager-managed LLC manager has authority to bind LLC; no member vote required for disposition unless operating agreement restricts" good_standing_source: "Delaware Division of Corporations (corp.delaware.gov)" turnaround: "1-2 business days standard; same-day available" new_york: notes: "NY LLC Law Section 412: manager or member managing an LLC may act on its behalf; operating agreement controls" good_standing_source: "NY Department of State (apps.dos.ny.gov)" turnaround: "3-5 business days" foreign_qualification: "Required if LLC holds NY property and formed outside NY" california: notes: "CA Corporations Code Section 17704.07: manager of manager-managed LLC has authority to convey; statutory default is member-managed unless operating agreement specifies otherwise" good_standing_source: "CA Secretary of State (bizfileonline.sos.ca.gov)" turnaround: "5-10 business days (expedited: 1-2 days at additional fee)" texas: notes: "TX Business Organizations Code Section 101.252: manager has authority; no member approval required unless company agreement requires" good_standing_source: "TX Secretary of State (direct.sos.state.tx.us)" turnaround: "2-3 business days" florida: notes: "FL Statute 605.04093: managers have authority to act for the LLC; operating agreement may impose restrictions" good_standing_source: "FL Division of Corporations (sunbiz.org)" turnaround: "1-2 business days" deed_witnesses: "FL requires two witnesses for deed execution; at least one must witness the signature" # --------------------------------------------------------------------------- # LIMITED PARTNERSHIP (LP) # --------------------------------------------------------------------------- limited_partnership: overview: | General partner (GP) has authority to convey. Limited partners (LPs) generally do NOT have authority to act for the partnership. LP consent may be required by the LP agreement for extraordinary transactions. general_partner_authority: default: "GP has broad authority to manage and convey partnership property (Uniform LP Act)" limitations: - "LP agreement may require LP approval for sale of 'substantially all assets'" - "LP agreement may require LP approval for disposition outside ordinary course" - "Some LP agreements require vote of 'majority-in-interest of limited partners'" check: "Review LP agreement Article __ (Major Decisions) carefully" resolution_requirements: if_gp_is_individual: - "GP signs as 'General Partner of [LP Name]'" - "No resolution required, but include GP certificate confirming authority and no restrictions" if_gp_is_entity: - "GP entity must provide its own authorizing resolution (board resolution if corp; manager resolution if LLC)" - "Authorized signatory of GP entity signs on behalf of GP entity on behalf of LP" - "Example: 'John Smith, as Manager of MU Holdings LLC, as General Partner of 123 Main Street LP'" - "Certificate of good standing for GP entity required as well as LP itself" certificate_of_limited_partnership: required: true content: "Confirms LP exists, GP identity, LP is in good standing" source: "Secretary of State in state of formation" note: "Some states issue a separate LP good standing certificate; others include LP status in the formation certificate" lp_consent_situations: if_required: - "Obtain written consent of limited partners holding required percentage" - "Follow any notice and quorum requirements in LP agreement" - "Document consent with LP written consent form signed by each consenting LP" upreit_op_unit_transactions: overview: "When an LP interest in a REIT Operating Partnership (OP) is involved" authorization: - "REIT acts as GP of OP; board resolution from REIT required" - "OP limited partners' consent typically not required for property-level transactions" - "If OP units are being issued as consideration: OP unit issuance requires REIT board approval or pricing committee authorization" documents_required: - "REIT board resolution authorizing transaction" - "OP unit subscription agreement" - "Amendment to OP limited partnership agreement admitting new LP" - "Tax protection agreement (if seller negotiated)" # --------------------------------------------------------------------------- # TRUST # --------------------------------------------------------------------------- trust: overview: | Authorization depends on trust type (revocable vs. irrevocable), trustee type (individual vs. institutional), and trust document provisions. revocable_living_trust: authority: "Grantor-trustee typically has full authority to convey" documents_required: - "Trustee's certificate of trust (confirms trust exists, not revoked, trustee has authority)" - "Some states require recording of a memorandum of trust or abstract of trust" - "Deed: 'John Smith, as Trustee of the John Smith Revocable Living Trust dated [date]'" - "Confirm grantor is still alive and trust not revoked" not_required: - "Full trust agreement (privacy protection; trustee certificate sufficient)" - "Beneficiary consent" death_of_grantor: "If grantor is deceased": "Revocable trust becomes irrevocable; successor trustee steps in" "Successor trustee authority": "Per trust document; obtain trustee certification from successor" "Probate": "Revocable trust assets bypass probate; successor trustee can convey" irrevocable_trust: authority: "Trustee (individual or institutional) per trust agreement" documents_required: - "Trust agreement (or relevant excerpts showing trustee authority to convey real property)" - "Co-trustee consent if trust requires co-trustee for real property dispositions" - "Beneficiary consent if trust requires it (uncommon but check)" - "Court approval if trust is under court supervision (special needs trust, testamentary trust)" institutional_trustee: additional_docs: - "Corporate resolution from institutional trustee authorizing this specific transaction" - "Officer certificate confirming signing officer's authority" dst_delaware_statutory_trust: overview: "Specialized trust structure for passive CRE investment; 1031-eligible" authority: "Trustee executes all documents; beneficial interest holders (investors) do NOT sign" documents_required: - "Trust agreement confirming trustee's authority to sell" - "Trustee resolution or certificate authorizing this specific sale" - "Investor consent if trust agreement requires majority or unanimous investor vote to sell" - "Lender consent if DST-level debt exists (lender typically approves sale as part of payoff)" dst_special_considerations: seven_deadly_sins: "If DST violated any prohibited activities (new debt, renegotiated leases, capital improvements beyond maintenance), consult tax counsel before proceeding -- tax-exempt status may be compromised" transfer_mechanism: "Conveyance is deed from trustee; not a beneficial interest transfer" title_insurance: "Title company insures based on trustee's authority; no issues specific to DST structure" # --------------------------------------------------------------------------- # C-CORPORATION # --------------------------------------------------------------------------- c_corporation: authority: "Board of directors authorizes sale; CEO/President or authorized officer executes" shareholder_approval: required_when: "Sale constitutes 'substantially all of the corporation's assets' (state law standard)" delaware_standard: "More than 50% of total assets (quantitative) or assets outside ordinary course" california_standard: "Assets exceeding 50% of book value or two-thirds of shareholders approve" practical_note: "If the corporation holds primarily this one property, shareholder approval is almost certainly required" resolution_requirements: board_resolution: - "Board of directors meeting minutes or unanimous written consent" - "Resolution authorizing sale: describe property, price, buyer" - "Authorization of officer to execute closing documents" - "Signature of corporate secretary certifying resolution" if_shareholder_approval_required: - "Special meeting of shareholders or written consent in lieu of meeting" - "Vote threshold: per state law and articles of incorporation" - "Filing requirements: some states require notice to SOS of asset sale approval" good_standing: - "Certificate of good standing from state of incorporation" - "Certificate of authority if qualified to do business in property state" transfer_tax: note: "C-Corp seller in some states may face additional transfer taxes or document taxes at the entity level" examples: new_york: "NYC Real Property Transfer Tax and NY State Transfer Tax apply; corp treated same as individual/LLC" pennsylvania: "State and local transfer taxes apply; no corporate-level surcharge" firpta: domestic_corporation: "Not a foreign person under FIRPTA; provide FIRPTA non-foreign affidavit" foreign_corporation: "Subject to FIRPTA withholding unless exemption applies; 15% of amount realized" # --------------------------------------------------------------------------- # S-CORPORATION # --------------------------------------------------------------------------- s_corporation: authority: "Same as C-Corp: board resolution + shareholder approval if substantially all assets" s_election_risk: check: "Confirm sale does not create a taxable year that causes S election termination" buyer_type_risk: "If buyer pays with OP units (UPREIT contribution): UPREIT is a partnership; S-Corp cannot have a partnership as shareholder; S election terminates" more_than_100_shareholders: "S-Corp cannot have more than 100 shareholders; if sale triggers new shareholders (e.g., earn-out with REIT shares), confirm S election preserved" other_requirements: "Same as C-Corp (good standing, officer authority, FIRPTA non-foreign affidavit)" practical_note: "S-Corp holding real property is unusual in institutional CRE; more common in closely-held single-asset transactions" # ============================================================================= # AUTHORIZATION CHAIN FOR MULTI-ENTITY OWNERSHIP # ============================================================================= multi_entity_chain: overview: | When multiple entities are stacked (individual -> HoldCo -> PropCo -> Property), each entity in the chain that is acting must authorize the entity below it. example: structure: - level: 4 entity: "Individual: John Smith (beneficial owner)" action: "Signs as Manager of HoldCo LLC" - level: 3 entity: "HoldCo LLC (DE) -- 100% owned by John Smith" action: "HoldCo LLC acts as Manager of PropCo LLC" documents: "HoldCo LLC manager resolution; John Smith signs as Manager of HoldCo" - level: 2 entity: "PropCo LLC (NY) -- 100% owned by HoldCo LLC" action: "PropCo LLC holds title; HoldCo LLC as Manager conveys on PropCo's behalf" documents: "PropCo LLC authorizing resolution signed by HoldCo LLC (acting through John Smith)" - level: 1 entity: "Property at 123 Main Street, New York" action: "Subject of sale" deed_signature_block: | PropCo LLC, a New York limited liability company By: HoldCo LLC, its Manager, a Delaware limited liability company By: /s/ John Smith John Smith, its Manager documents_required: - "HoldCo LLC: Delaware certificate of good standing" - "HoldCo LLC: Manager resolution authorizing HoldCo to act as PropCo's manager in this transaction" - "PropCo LLC: New York certificate of good standing (and foreign qualification certificate if applicable)" - "PropCo LLC: Manager resolution (signed by HoldCo LLC acting through John Smith)" - "Operating agreement of PropCo LLC confirming HoldCo is manager" - "Operating agreement of HoldCo LLC confirming John Smith is manager with authority to act" common_defects: - defect: "Entity manager shown in operating agreement differs from current manager after undocumented assignment" cure: "Execute manager assignment or amendment to operating agreement; re-do resolution under correct authority" - defect: "Operating agreement version delivered to title is not the most recent (hidden amendment)" cure: "Obtain certification from seller that the delivered agreement is complete and in full force" - defect: "Child entity dissolved or suspended in home state" cure: "Reinstatement filing; allow 5-15 business days; may require back fees and penalties" - defect: "Entity formed in jurisdiction with annual franchise tax; taxes delinquent" cure: "Pay delinquent taxes; obtain reinstatement; reinstatement is retroactive in most states"