What Happens When a Home Sale Requires a Corporate Resolution?
By Mike Bennett
Selling a property owned by a corporation or business entity can involve additional paperwork beyond a standard home sale. One document that may be required is a corporate resolution. It formally records the company's approval of a property transaction and identifies who has authority to act on its behalf.
Understanding when a corporate resolution is needed and how to prepare it can help prevent delays during the sale.
1. What Is a Corporate Resolution?
A corporate resolution is an official record of a decision made by a corporation's board of directors or other authorized decision-making body. When a company sells real estate, the resolution may confirm that the sale has been approved and identify the person authorized to sign the necessary documents.
The document provides evidence that the individual representing the company has the required authority to complete the transaction.
2. Why Might a Home Sale Require One?
A title company, closing attorney, lender, or buyer may request a corporate resolution to verify that the company has properly authorized the sale.
This is particularly relevant when a property is registered in a corporation's name rather than an individual's name. The request helps establish that the person signing the purchase agreement and closing documents is permitted to act for the business.
Requirements vary depending on the company's governing documents, the property's location, and the closing professionals involved.
3. What Information Should the Resolution Include?
A corporate resolution generally identifies the company and records its approval of the proposed transaction. Depending on the circumstances, it may include:
The corporation's legal name
The date of the resolution
Details identifying the property
Approval to sell the property
The name and position of the authorized representative
The representative's signing authority
Required signatures and certification
The resolution should follow the company's bylaws, operating procedures, and applicable legal requirements.
4. Who Can Approve and Sign It?
The appropriate approval process depends on the corporation's governing documents and applicable law. In some cases, the board of directors must approve the sale. In others, an officer or another authorized body may have the necessary authority.
The resolution should accurately document the approval and identify the person permitted to sign the transaction documents. A company should not assume that an employee or officer automatically has authority to sell real estate.
5. What Happens If the Resolution Is Missing?
If a required corporate resolution is unavailable, the title company or closing attorney may be unable to verify the seller's authority. This can delay the closing while the company obtains the necessary approval and documentation.
In some circumstances, the buyer or closing professional may request additional corporate records, such as bylaws, articles of incorporation, or a certificate of good standing.
Preparing these documents before accepting an offer can reduce the risk of last-minute complications.
6. How Can Sellers Prepare for Closing?
Company representatives should contact the title company or closing attorney early to confirm exactly what is required. They should review the corporation's governing documents, arrange the appropriate approval, and ensure the resolution is properly signed and certified.
It is also important to confirm whether the closing company requires an original document, a certified copy, or another approved format.
If the corporation is considering a cash transaction, Sell My House Fast For Cash is one option to explore when comparing offers and expected timelines. However, a cash sale does not eliminate corporate authorization, title verification, or other legal closing requirements.
Conclusion
A corporate resolution can play an important role when a company sells a residential property. It documents the company's approval and confirms who is authorized to complete the transaction. By arranging the resolution early and coordinating with the closing professionals, corporate sellers can help avoid unnecessary delays and move toward a smoother closing.
