Attorney pointers: Planning ahead to buy and sell Corp/LLC-owned real estate in Florida

Corporate owned real estate sales and purchases can turn out to be unnecessarily complicated transactions. For sales in particular, lack of proper documentation showing authority to sell can lead to delayed or in some cases, cancelled transactions.  Foreign companies owning USA real estate require some additional planning and documentation to be able to adequately provide the buyer’s title company or attorney with their title requirements to close.  Hiring experienced corporate counsel, even for a one property acquisition, can make things easier for a future sale or financing. You can download our recommended Corporate document checklist for real estate

We asked Anna Krimshtein, Esq, a seasoned Florida corporate Attorney to answer some frequently asked questions on this topic:

What is the most important things you would tell a corporate client (used generically)  to have prepared and ready for their first real estate purchase? When buying first real estate through a business entity, which is most commonly is a limited liability company, it is most important to have the following documents ready: incorporation documents, certificate of good standing and Operating Agreement or Partnership Agreement or Shareholders’ Agreement, as applicable.

What documents are imperative to have ready and current for a company owned asset sale? It is imperative to have documents that show ownership of the asset (deeds, bills of sale, etc.) and documents showing what kind of authorization is required on behalf of the owners of the company to sell the asset.  Such authorization is usually provided in the Operating Agreement.  Therefore, it is imperative to have the Operating Agreement ready.

When is using a Power of Attorney not advisable? If you are going to be present at the closing yourself, then using a Power of Attorney is not necessary and is not advisable.  If you are frail and your mental capacity to give Power of Attorney could be questioned, giving a Power of Attorney is also not advisable.  Short of that, so long as the Power of Attorney is properly drafted, there are very few issues with using a Power of Attorney to sell property. The Power of Attorney should be limited in terms of how long the Power of Attorney is valid, and to what purpose it is to be used.

A Power of Attorney can also be used to purchase or refinance real estate, but the client must check with the lender to confirm their willingness or requirements about using a Power of Attorney. Each lender has different rules regarding the use of a Power of Attorney.  Some banks require that the lawyer preparing the mortgage be the lawyer that prepares and witnesses the Power of Attorney.

What would original documents would recommend non USA companies holding USA real estate have updated and available at all times? Corporate documents that have to be updated annually, i.e., resolutions and annual reports.

Should foreign non USA companies  register in FL ? If a foreign entity is purchasing commercial real estate, it has to register to do business in Florida, as owning real estate rises to the level of “doing business in Florida”, as defined in the Florida Statutes.

Anything else you would like to add? If you are buying real estate and will hold the title in a business entity, it is advisable to consult with a tax accountant and/or an attorney to make sure that the right entity is selected and that there are no negative tax implications.

For more information, Anna Krimshtein, Attorney at Law, can be reached at  (305) 932-4100 or anna@aklawplc.com

For information on the title or closing process , please contact us at 305-521-2080 or info@theclosingcompany.net

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