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Law Educator, Esq.
Law Educator, Esq., Lawyer
Category: Real Estate Law
Satisfied Customers: 118130
Experience:  Licensed attorney practicing landlord-tenant, land use and other real estate law and litigation.
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Purchased a rental property in Texas on a visit many years

Customer Question

Hi There,
I am Australian and purchased a rental property in Texas on a visit many years ago. I set up an LLC to buy the property but it cost too much and was too hard to maintain so I let the filing fees for the LLC mount up and the company has now been forfeited I believe. I now have an investor who wants to buy the property from me and I want to know if I can close on the sale without having to fix up the LLC? It could be reinstated with a lot of manual paperwork and two months to process but I don't have that kind of time. The option sale contract has my own name down as the seller and I'm hoping I can go ahead and close like that? If not could I set up a new LLC with the same name as the old one which would be much quicker? Thanks so much for your time. I really appreciate it.
Submitted: 2 years ago.
Category: Real Estate Law
Expert:  Law Educator, Esq. replied 2 years ago.

Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.

Unfortunately, for the LLC to conduct any business, it has to be reinstated. Thus, you have to reinstate the LLC to have the legal capacity to conduct business, which means selling the property if the LLC is on the deed as the owner of the property. It does not matter the name on the contract, what matters is the name on the deed for the property. If the LLC is listed as owner, then the LLC has to sell.

Now, if you are member of the LLC and you fully disclose to the buyer the entire situation and they agree to fix the LLC in order to be able to put the deed in their name and you write that into the contract, you can sell your interest in the LLC to the buyer and they would then be responsible for changing the deed to their name from the LLC after paying to reinstate the LLC.

If your name is ***** ***** deed of the property and not the LLC, then you can go ahead and sell in your name without worrying about the LLC.

Setting up a new LLC would not resolve your situation though.

Customer: replied 2 years ago.
Hi Thanks so much for your answer. I'm not sure exactly what you mean by selling my interest in the LLC. Would I still have to wait the 4-6 weeks for reinstatement of the LLC before we can close on the sale anyway? Basically I'm trying to be able to close on the property in the next two weeks, not two months. Thanks so much.
Expert:  Law Educator, Esq. replied 2 years ago.

Thank you for your reply.

Not if the buyer agrees to take the LLC and reinstate it themselves. If the buyer agrees to reinstate, which they would need to do in order to move or change the deed, then you can sell that without waiting to reinstate.