While a legal entity (LLC, Corporation, Trust, or other) can purchase and sell real estate – a legal entity cannot sign or initial documents.
According to the A.A.R., “In instances in which an LLP, LLC, Corporation, or other entity is the principal in a contract, the signature line should be signed by the individual who has authority to sign on behalf of the entity.” So the authorized signer cannot sign as, “ABC, LLC”. Instead, they should sign as their natural self on behalf of the entity, “Bob Smith” for example.
NOTE: To access this link, signing into AARonline.com is required.
What do I do if the documents have already been signed incorrectly?
If Tierra Antigua Represents the Client:
The client should re-sign and initial (next to all previous signatures and initials) as their natural self, “Bob Smith” for example.
If Tierra Antigua does NOT Represent the Client:
Ideally, the Buyer/Seller should re-sign and initial (next to all previous signatures and initials) as their natural self, “Bob Smith” for example. If the other party refuses to make this correction, please contact your sales manager so that we can help remedy the situation.
How should I set this up in Dotloop?
If your client has already signed incorrectly:
- Change the entity’s name in Dotloop to the name of the authorized signer, “Bob Smith” for example.
- Create a flat copy (a PDF without fillable fields) of the documents to be resigned if needed.
An easy way to make a flat copy is to download the documents from Dotloop. You can then take those downloaded documents (flat copies) and upload them back into your loop.
- You can then add new signature and initial fields (for the natural person) next to all the previously signed and initialed fields.
If your client has not yet signed:
- Add the authorized signer to Dotloop using their natural name, “Bob Smith” for example.
- Autofill all documents requiring signature or initials in Dotloop.
- Change the name of the Buyer/Seller (whichever is your client) on each form to the entity name, “ABC, LLC” for example.
Your documents should now reflect the entity named as the Buyer/Seller, and each initial and signature field should be the name of the authorized signer.