Pitfalls In An LLC Real Estate Joint Venture

The Limited Liability Company, the “LLC,” is a common structure for real estate joint ventures and for good reason, according to Justin Thompson and Tom Muller of the law firm Manatt, Phelps & Phillips. But it is, they write, “not without pitfalls.” They look at three categories of LLC agreement provisions that need to be scrutinized carefully: distributions; “management, major decisions and deadlock”; and capital calls. “In the end,” they write, “there is no substitute for thorough discussion of the deal and careful drafting.”