LLC Operating Agreement (Commercial Real Estate, Member-Managed, Short Form)

by Practical Law Real Estate

A Standard Document providing a short-form operating agreement for a real estate joint venture structured as a member-managed limited liability company (LLC). This agreement is drafted as a Delaware LLC formed between two or more members to acquire, own, and operate a single commercial real estate project. This Standard Document outlines the fundamental terms governing the relationship between the members, including their respective rights and obligations. Key provisions address the company's formation and purpose, initial and additional capital contributions, and procedures for handling a member's failure to contribute. It also details the allocation of profits and losses, the priority of distributions through a waterfall structure, and the management and voting framework, specifying actions that require a majority or supermajority vote. This Standard Document also covers transfer restrictions on member interests, member representations and warranties, and critical tax matters.