What if one member of a Winston-Salem LLC doesn’t want to sell an investment property?

In this example, an LLC in Winston-Salem owns several properties, and there are three members in the LLC.

One member contacts a real estate agent about listing one of their properties. They tell the agent that one of the other members of the LLC, wants to sell one property in order to invest in another property. However, the third member does not like this plan.

Can the agent take this listing? If so, who should sign?

Generally speaking in North Carolina, an LLC can be bound by any one member who has authority to sign.

The authority of a particular member to sign may come from an operating agreement, or it may come from North Carolina law. So it’s important to first ask if there is an operating agreement, because that document will control.

There is an important exception in North Carolina Law that allows one member of an LLC to sign, and that exception applies when the LLC will be selling substantially all its assets prior to dissolution. If the exception applies, then all members must sign for the transaction(s) to be binding.

If the LLC is not in the process of being liquidated, then there is a good chance that the signature of one member of the LLC would likely be sufficient to bind the LLC to a listing agreement, sales contract, and other documents in the transaction.

HOWEVER, the fact that one member of the LLC is not on board with the sale is a bit of a red flag.

The disagreeing member may bring a lawsuit, and if successful, it may well block any transaction from taking place. The listing agent will be in a position where they invested a lot of time and expense only to be told by a court that the sale can’t go through.

So although it might not be technically necessary, it may be best to not take the listing unless all three members agree and sign the listing agreement.