A concern was posted today on the Iowa Bar's Real Estate Law list serve regarding whether the consent of all the members of an LLC is required under Chapter 489 in order to sell real estate owned by a manager-managed LLC. First of all, the author of the post cites a section of Chapter 489 dealing with the sale of all or substantially all of the assets of an LLC outside the ordinary course of business. Second, the answer is the operating agreement will control.
Remember from past posts that Chapter 489 is a default statute. With certain exceptions (enumerated in Section 489.110(3)) the operating agreement controls (1) the relationship among the members and between the members and the LLC, (2) the rights and duties of the managers, and (3) the conduct of the activities of the LLC. SeeIowa Code Section 489.110(1)(2009). Thus, the terms of the operating agreement will dictate the approval necessary. Most likely in manager-managed LLCs the managers will have the authority to sell real estate in the ordinary course of business and some level of approval will be required for sales of all of the assets outside the ordinary course.
The author raises a second issue with respect to Statements of Authority and whether the reference to recording a "certified copy" of the statement in the county recorder's office means a copy certified by the Iowa Secretary of State. The answer is YES. Section 489.302(6) is derived from Section 303 of the Revised Uniform Partnership Act. While the Official Comments to the Revised Uniform Limited Liability Company Act are silent on this issue the Official Comment on Section 303 of RUPA states that "the statement recorded with the land records must be a certified copy of the original statement filed with the Secretary of State." To me, this means certified by the Iowa Secretary of State.
-Marc Ward
Comments