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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Real Property - Transactions

Date & Time
  • event Date

    Thursday, September 5, 2024

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$347.00
CLE
ALL

This CLE webinar will provide a comprehensive look at drafting real estate operating agreements and related legal issues. The panel will examine the pros and cons of creating a limited liability company (LLC) for real estate companies and address industry-specific key terms and drafting considerations for operating agreements. The panel will offer best practices for practitioners and address pitfalls to avoid.

Faculty

Michael J. Fritz
Partner
Dorsey & Whitney Llp

Mr. Fritz concentrates his practice on commercial real estate capital market transactions and general corporate counseling. He regularly advises national and multinational clients in the commercial real estate industry. Mr. Fritz has over 17 years of experience in handling complex and high-value transactions, such as acquisitions, dispositions, financings, and joint ventures. A large part of his practice is dedicated to representing developers, sponsors, investors, and other capital market participants. Mr. Fritz regularly handles the acquisition, development, and disposition of commercial real estate assets, mortgage and mezzanine financings, preferred equity investments, and the structuring of joint ventures. In his joint venture practice, he focuses on helping his commercial real estate clients structure joint ventures for both single asset and programmatic real estate investment strategies

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Tom Whitten
Attorney
Dorsey & Whitney Llp

Mr. Whitten partners with real estate and finance clients to guide transactions from inception to closing. He uses his understanding of the market and clients' business concerns to guide all aspects of his practice. Mr. Whitten regularly counsels clients through real estate acquisitions, dispositions, development, leasing, borrowing, and lending transactions.

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Description

In recent years, more and more real estate investors and developers are opting to form LLCs due to the flexibility allowed to define the business relationship via the operating agreement and for certain liability protection and tax advantages.

Real estate entities have unique business needs to be protected and addressed in their operating agreements beyond basic boilerplate language and template agreements. Counsel and their clients should take the time to determine whether an LLC is the right entity for their business, examining the pros and cons, including liability and tax benefits. They should also carefully consider the details of how the business will operate and be managed to be accurately reflected in the operating agreement including whether the LLC will be manager or member managed, the capital contribution process, transfer or assignment of member interest, restrictive covenants, and dispute resolution.

In addition to business-specific needs, counsel and clients should be aware of the impact the Corporate Transparency Act may have on their business and any state law considerations.

Listen as our expert panel provides a comprehensive look at drafting operating agreements for real estate entities. The panel will discuss the pros and cons of using an LLC in real estate, address key terms and drafting considerations unique to the industry, and offer best practices for practitioners.

Outline

  1. Introduction
    1. When to consider an LLC for real estate investors and developers
    2. Pros v. cons
  2. Drafting the operating agreement to protect the members
    1. LLC purpose
    2. Manager and member roles
      1. Management structure
      2. Decision-making authority
      3. Adding/removing members
    3. Voting rights
    4. Capital contributions
    5. Securities laws
    6. Insurance
    7. Distributions
    8. Tax treatment
    9. Transfer or assignment of interest
    10. Dispute resolution
    11. Loans and guarantees
    12. Restrictive covenants
    13. Exit strategy
    14. Other
  3. Corporate Transparency Act and state law considerations
  4. Practitioner takeaways

Benefits

The panel will address these and other important considerations:

  • When should counsel recommend LLC formation to their real estate clients?
  • What are the pros and cons of LLC formation for real estate entities?
  • What are issues unique to real estate entities that should be addressed in the operating agreement?
  • What key terms should be included in the operating agreement?
  • What state law considerations should be taken into account when drafting a real estate operating agreement?
  • What are issues related to the Corporate Transparency Act that counsel should consider when drafting a real estate operating agreement?