A Tennessee LLC holds title to a rental duplex in Memphis. One of the LLC's members, Trevor, sells all of his membership interest to a new investor, Ursula. What happens to the LLC's title to the duplex?
Correct Answer
B) The LLC retains title to the duplex unchanged because the LLC is the titleholder, not the individual members
An LLC (Limited Liability Company) is a separate legal entity from its members. In Tennessee, when an LLC holds title to real property, changes in LLC membership — including the sale of a member's interest — do not affect the LLC's ownership of the property. The LLC continues to hold title to the duplex unchanged. Ursula becomes a member of the LLC, which owns the property, but she does not directly hold title to the real estate.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A life estate is a freehold estate that grants ownership rights for the duration of someone's life.
Real property is immovable land and anything permanently attached to it, while personal property (also called chattels) is movable.
Tenancy by the entirety is a form of co-ownership available only to married couples that includes the right of survivorship and protection from individual creditors. Neither spouse can unilaterally sell or encumber the property.
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