QUESTION
Can I force the sale of a jointly owned property listed as a LLC?
Asked on Dec 16th, 2012 on Estate Planning - Michigan
More details to this question:
Can I force the sale of a joint? I have a tricky question. About five years back, my father passed away and I acquired his percentage of the home he owned. At the time of his death, the home was listed as a LLC and he was 50/50 partners with my uncle. Long story short, I acquired 50% of the home after probate. Since it was a LLC, the home was reappraised for property taxes after my father's death; I paid off the mortgage and the rent I collect barely covers property taxes now. It currently is not the best financial decision for me and I want out. I would like to sell to my 50% and purchase a home of my own. We have not been able to agree on a fair value and I do not believe he has the funds available. On a side note, the LLC has not been kept up-to-date. Can I force a sale of the property owned property listed as a LLC?
13 ANSWERS
Elder Law Attorney serving Hollister, CA
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Charles R. Perry
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It will depend on the terms of the Operating Agreement for your LLC. You need to consult with a business attorney who can review that Agreement and help you plan a strategy to either sell your interest in the LLC, or to dissolve the LLC and force a sale of the property.
Answered on May 23rd, 2013 at 9:50 PM
As a joint owner you should be able to sell your interest. You need to consult an attorney to review all of the facts including the status of the LLC and advise you how best to proceed.
Answered on Dec 18th, 2012 at 1:05 PM
Business Transactions Attorney serving Glendale, CA
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Richard E. Blasco, Inc.
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You have a complex legal problem and need to see a real estate attorney. Sell your interest, or buy out your uncle. The easiest way to resolve a valuation dispute is to offer to buy or sell the 50% interest. If you acquire 100% of the property, you can then sell it. Note that if the LLC's rights have been suspended, the LLC cannot sell the property without its rights being reinstated. You have tax issues with the Franchise Tax Board, and, if you acquire the property, you need to coordinate the sale with paying the FTB.
Answered on Dec 18th, 2012 at 1:03 PM
Trusts Attorney serving Sacramento, CA
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Law Office of Victor Waid
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You need to obtain the services of a real estate lawyer to unwind the situation you or your father put yourself in re the sale of your half of the property, and to clear the title as the title is now mucked up.
Answered on Dec 18th, 2012 at 7:09 AM
Probate Attorney serving Newport, OR
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Minor, Bandonis & Haggerty P.C.
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Probably. The LLC adds a level of difficulty, but you should still be entitled to a "partition," which will result in a court-ordered sale. This will add cost and bring bargain-hunters, so it is better to avoid it if you can through negotiation.
Answered on Dec 18th, 2012 at 7:08 AM
Real Estate Attorney serving Honolulu, HI
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Zahaby Law Offices
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If by "force the sale" you mean filing a partition action. No, you can not file a partition action, however, a complaint can be filed in such a way that the Corporate components of ownership are recognized and separation of LLC member interests is prayed for and deemed necessary by the court. The amounts you have paid can be used as set-off against any buy-out price.
Answered on Dec 17th, 2012 at 6:05 PM
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Probably not but you need to look, or have a lawyer look at the LLC agreement.
Answered on Dec 17th, 2012 at 6:05 PM
William R. Pelger, Attorney Munhall, Pennsylvania 412-461-1900
Alternative Dispute Resolution Attorney serving Baltimore, MD
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Whiteford, Taylor & Preston L.L.P.
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You might be able to force a sale through a petition for sale in lieu of partition.
Answered on Dec 17th, 2012 at 6:04 PM
Commercial Contracts Attorney serving Boise, ID
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Peters Law, PLLC
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It sounds like you need to go to court and ask the court to order a winding up of the business or a sale of the property. There should be an operating agreement determining the rights of the members of the LLC. If there is not one, then the statute would cover it. However, if the LLC has been dissolved because it failed to file an annual report, then it may be dissolved and the property now belongs to you and your uncle. Regardless, take your documentation to an attorney and let him or her figure out what your options are.
Answered on Dec 17th, 2012 at 6:04 PM
Yes, but it depends on the language of the LLC. You state the LLC has not been kept up. I assume you mean the LLC fees have not been paid. That means you and the other LLC members may be personally liable should something happen on the property. Starting point is the LLC agreement. Meet with an attorney if you and your uncle cannot agree on a buy out. Best solution seems to be to agree on a price, turn it over to a real estate agent under a contract that you and your uncle sign as members of the LLC and split any proceeds in the event of the sale. You mention you paid off the loan, what does the LLC agreement say about capital contributions and reimbursement of those contributions. That payment should increase your entitlement under most agreements. Sounds like you need an attorney.
Answered on Dec 17th, 2012 at 6:04 PM
3 Awards
You need to review the LLC's operating agreement and Articles of Organization which will address issues like the one you face. You should probably seek legal counsel.
Answered on Dec 17th, 2012 at 6:03 PM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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You're going to have to see an attorney, for you actually do not own the property but rather the membership interest in the LLC, which is what you're actually attempting to sell to your uncle.
Answered on Dec 17th, 2012 at 6:03 PM
Business Planning Attorney serving Livonia, MI
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Frederick & Frederick Attorneys at Law
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Yes, this can be done. It is called a partition action. The problem you have is that you may be able to force a sale, but not to find a buyer for the price you want. You cannot force your uncle to pay something he cannot afford. But he cannot prevent you from getting authority to sell the property, if the judge agrees.
Answered on Dec 17th, 2012 at 6:03 PM