Mississippi Real Estate LLCs

Are new changes coming for Mississippi real estate LLCs?  The June 2010 newsletter of the Real Estate Section of the Mississippi Bar had this to say about the use of LLCs to hold real estate:

Limited liability companies currently seem to be the preferred form of entities for real estate these days. But many Mississippi statutes that are relevant to real estate still address corporations only. Examples include Section 15-1-11 (statute of limitations to recover land due to defects in corporate formalities); Section 27-7-308 (exception for withholding five percent of proceeds when seller is a foreign corporation); and Section 89-1-21 (how a corporation conveys land). Isn’t it time that these statutes were amended to include limited liability companies and limited partnerships?

I couldn’t agree more.  Limited liability companies have exploded in popularity since they first gained traction in the early 90s.  But the law has lagged behind.  Sometimes these changes can be used to the client’s advantage (I won’t give away any secrets here).  But most of the time, we end up with a patchwork of interdependent code provisions that no longer match the realities of the real estate marketplace.

The Mississippi legislature has been taking a more proactive approach in evaluating our business laws. And while the majority of our estate and trust laws look like they were written by gradeschoolers in the 18th century, the study groups headed by Secretary of State Delbert Hosemann have gone a long way toward bringing our business laws into the new millennium.  For example, the new LLC registration requirements–while admittedly adding a little hassle–are more in line with good practice in the modern legal environment.  Perhaps the legislature will take a look at the sections identified by the bar to bring them up to speed as well.