In Missouri, can owners of LLCs manage their own property?

Question

I own a handful of rental properties of which I am currently managing myself.  The properties are not within an LLC because they are traditionally financed.   I have an LLC set up mainly as an asset protection vehicle.  Currently, my LLC is performing manager functions such as showing and renting properties, collecting rent, doing rehabs, ect.... My attorney seems to think that in Missouri, I can't manage my own properties within the LLC because I am not a broker/my LLC is not a brokerage.  This seems crazy to me.  Does anyone have any experience with this or any suggestions?  I really don't want to have to hire a property manager but I also fear managing the properties in my own name vs an LLC.

Bill Gulley · Answer

In MO, as Peter stated, you as an individual can manage your property held personally or in your closely held LLC. That's not what is going on here, your LLC is managing for you, your attorney is correct, not only that, but if you have a property in an LLC, you can't represent the LLC in court you'll need an attorney, owning individually you can represent yourself. Your LLC can't represent you or your properties in court either.

I suggest you stay on one side of the fence or the other, the LLC owns the properties or you own personally and don't mix the two functions.

Now, funny thing about MO, St. Louis is different than Jeff City, Springfield or K.C. all real estate is local, meaning the interpretation of regulatory matters can be different, St. Louis is more liberal than Springfield for example. Your attorney knows the lay of the land in your area, go with his advice. :)

Account Closed · Answer

your properties are in your name how does the llc protect you? It sounds like your attorney is right, also @Bill Gulley is correct you can represent yourself for your individual properties in court but not as an LLC I own my properties as an LLC and had to hire a lawyer to do an eviction

Account Closed · Answer

@Sandy Uhlmann

listen to

@Bill Gulley

he knows what he is talking about.

Good luck!

Peter MacKercher · Answer

You can self manage your own property whether its in an LLC or not. You can not manage for other people without your broker's license.

Don Ireland · Answer

I realize this is an old thread but I've recently been researching a very similar issue.  The responses given here directly conflict with those given at the following link.

https://www.avvo.com/legal-answers/how-can-a-prope...

Following is the most pertinent reply from that link (given by a KCMO RE Attorney):

Because generally, if acting as an agent for the owner while managing the property, the property management company is exempt from the requirements.

After further discussion it seemed the the crux of it is to not have the Mgmt Co take a fee.

James Syed · Answer

Welcome to BP.

I am an Illinois real estate broker. I have all my properties under my series LLC and I manage them all.

Having said that, I don't think you need to hire a property manger to manage your properties because you own them even though they are under your LLC. I am not sure why your real estate attorney is suggesting that.

You might want to consult another Missiouri real estate attorney for second opinion.

Hope it helps.

Laura Williams · Answer

@Sandy Uhlmann Hi Sandy! I think I can help you. I just went through this drama with the city of KC. I am like you in that I own properties in the name of an LLC in Kansas City MO (good part of Urban Core) . The lawyer that set up my LLC signed me up for a business license (that I didn't know about) and I started getting letters from the city stating that I needed to file tax returns (even though I don't live there)  and file for a business license for 2015 and that I was going to get fined etc. I called the city to clear it up (pain). So basically here it is. You do need a business license if you are managing your own properties according to the person I spoke with. It doesn't cost very much and you can just get one...I think it would have been about $25 for the year (and goes higher the more you make)  and then you have to file a special tax return with the city once a year. Now if you have a local property manager that has a business license (which is totally different than a brokerage license which they also need) then you don't need one ....you can manage under their business license. But either you or your property manager supposedly need this business license from the city. To be honest I'm not sure that if I was managing my own properties if they would have ever known if that lawyer hadn't signed me up for that license it in the first place.  Also depending where your properties are located it might be different in different areas around the city.

Steve Babiak · Answer

That guy

Bill Gulley is from MO ...

Sandy Uhlmann · Answer

Thanks for the input.  My properties are not held in an LLC at present but my LLC currently is collecting rent checks, maintaining the property, ect..... My attorney is a real estate attorney and she is the one saying that I may need a property manager to manage the property because of the Missouri statute that individuals can manage their own properties but LLCs cannot.  Kyle, I agree with you 100%-that makes sense to me, I addressed that very issue with my attorney who said that "person"  (individuals) does not include LLCs and therefore my LLC cannot be manager of my rentals unless my LLC is a brokerage.

In my eyes, this  leaves me with only 2 options; Manage in my own name or become a broker.  I am just having a hard time believing that this can my only options.  Why bother having an LLC at all for real estate in Missouri if this is the case.  I just don't know what to do.

The statute she points out is Section 339.010.7S if that is any help

Raphael J. · Answer

Have a sit down with a local broker and or a Real estate attorney they should give you all the clarity you are looking for.

In Missouri, can owners of LLCs manage their own property?

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