Legal Question in Business Law in California

Re: LLC Partner withdraws verbal consent agreement

This response is under California Law only: You do not have a problem with a lack of signature on the LLC agreement. The issue is the ownership of the property. If the LLC owns the property, you should prevail, but if the members own the property and the LLC manages the property, then you may need a writing from each owner and, the dissenting member may withdraw their consent for use of the property, unless the consent is in writing. Further analysis and research would be warranted.

Joel

JOEL SELIK

Attorney at Law

800-894-2889

760-479-1515

702-243-1930

Licensed to Practice Law in California and Nevada Only

CA Licensed Real Estate Broker

CONCENTRATING IN REAL ESTATE, ELDER ABUSE, LITIGATION AND COLLECTIONS

Personal Injury, Contracts, Tax Matters, Business,

Malpractice, Appeals, Elder Neglect/Abuse/Nursing Home Malpractice

Real Estate, and Other Legal Matters

This is just general information. No representations are made and no attorney client relationship is established by this communication. In most matters there are strict time limitations within which actions may be taken or your rights will be compromised. We are not taking any action on your matter and will not be considered your attorney or tax representative until both you and we have signed a fee agreement.

We, therefore will take no action on your behalf unless a written retainer agreement is signed. There are strict deadlines, called statutes of limitation, within which claims or lawsuits must be filed. Therefore, if you do not retain SELIKLAW, you should immediately seek the services of another attorney or other advisor.

If you send a lawyer or law firm email, your email will not create an attorney-client relationship and will not necessarily be treated as privileged or confidential. You should not send sensitive or confidential information via email. The lawyer or law firm to whom you are writing may not choose to accept you as a client. Moreover, as the Internet is not necessarily a secure environment it is possible that your email sent via the Internet might be intercepted and read by third parties.

Re: LLC Partner withdraws verbal consent agreement

If #9's property is still titled in her name, she cannot be forced to cooperate. If #9's property is in the LLC she will be bound by the decisions of the majority vote of the LLC members. If son has PoA, then if he signs the LLC documents on her behalf, she is bound. He may also be able to transfer the property into the LLC if not yet transferred. If #9's concern is the articles of the LLC, and she participated, she is bound. If she participates and acts as a member, she can be treated as a member - unless thee opertaing agreement requires a signature by a member. In that case the signature is required.

Re: LLC Partner withdraws verbal consent agreement

You have an answer from a Utah attorney as to California law. He isn't supposed to be answering, but as a matter of fact, he's probably right.

I would say that the oral agreement to become a member of the LLC, especially coupled with participation in its business,probably amounts to a binding agreement to become a member. The real question is, however, what are the obligations of members with respect to capital contributions?

If the other 8 members were obliged to contribute their 1/9 interests in the property, there is a serious problem with enforcement against her. California law is pretty rigid in requiring a signed writing in order to enforce a promise to convey any interest in real property. Someone at the meeting should have gotten her signature on something that could be interpreted as an agreement to participate fully, including transfer of her fractional interest in the land.

The wavering on this lady's approach looks like a long-term problem. One possible solution (if negotiations fail) is to institute partition proceedings. While the goal of a partition suit is to force the sale of co-owned real property, the result often is to bring a recalcitrant co-owner to the bargaining table in earnest.

The situation described requires more than cookie-cutter answers and more than just dry principles of law. Someone with practical deal-making and negotiation skills as well as an understanding of the law involved should be brought in by the LLC to deal with the ninth owner.