Using an Operating Agreement for Joint Ownership

[Matt Liu]

I am buying a rental house with a friend. We are using an LLC. Does anyone have recommendations for what to put in the OP AG besides the standard stuff? What do we do if we disagree on things? Should we have in there that we have to get 3 appraisals if one of us wants to buy out the other?

[Pat L.]

Bill covered everything but just as an aside :-

if title is held in the name of the LLC & you eventually sell it here is what they (i.e.: our attorney, the attorney for the buyer & Title Company etc) always require from us to compete the sale etc.

So you will quickly appreciate that it's imperative that you maintain detailed/updated LLC docs.

1.Certificate of Incorporation.

2.Proof of Publication

3.Operating Agreement, including who has authority to sign on behalf of LLC

4.Affidavit that no changes has been made to the operating agreement

5.Resolution authorizing signature of transfer.

.... & for our 'partnerships' we find the tighter the Op Agreement the better.

PS: I also had to produce all of the above & the Op Agreement addendums pertaining to certain property acquisitions during my IRS Audit.

good luck