Can a Delaware LLC Own Real Estate?

Q: Can an LLC own real estate in Delaware?

Yes. Delaware LLCs can own, hold title to, and manage real estate without restriction. The Delaware LLC Act (6 Del. C. § 18-101 et seq.) grants LLCs full legal capacity to acquire, hold, mortgage, lease, and sell real property. Once you file your Certificate of Formation with the Delaware Division of Corporations, your LLC becomes a separate legal entity capable of holding title in its own name.

How It Works

Your LLC may hold title to real estate in Delaware or any other state. The LLC can enter into purchase agreements, obtain mortgages, lease property to tenants, and execute deeds. Delaware imposes no special licensing, publication requirements, or restrictions on real property ownership by LLCs.

The deed should identify the LLC as the grantee. Title is recorded in the county where the property is located under the LLC's legal name.

Liability Protection

Real estate ownership in an LLC shields members' personal assets from property-related claims. If someone is injured on the property or a lawsuit arises, creditors cannot reach members' personal assets—only the LLC's assets. Delaware's charging order protection (6 Del. C. § 18-703) further protects members by limiting creditor remedies to a charging order, not direct asset seizure.

Operating Agreement

While Delaware does not require a written operating agreement (6 Del. C. § 18-101(9)), one is strongly recommended for real estate holdings. The agreement should specify:

Which members or managers authorize property transactions
Profit and loss allocation
Restrictions on property sale or encumbrance

Without an agreement, Delaware's default rules apply: member-managed structure with equal profit sharing.

Financing & Title

Lenders will require the LLC to hold clear title and typically request an operating agreement and a resolution authorizing the transaction. Obtain an EIN (Employer Identification Number) from the IRS for the LLC. Title insurance companies will insure property held in the LLC's name.

Privacy Option

Delaware's anonymous LLC option (6 Del. C. §§ 18-215, 18-218) allows real estate ownership without public disclosure of member names in state filings. Only the entity name and registered agent appear on the Certificate of Formation.

Next Steps

File your Certificate of Formation with the Delaware Division of Corporations
Draft an operating agreement addressing real estate authority
Obtain an EIN from the IRS
Title the property in the LLC's name (consult a real estate attorney in your property's state)

Consult a Delaware business attorney and real estate professional for tax implications and title transfer procedures.

This is general information, not legal advice.