Notices

LLC Operating Agreement

Old 08-27-2015, 03:35 AM
  #1  
Senior MemberCaptains Club Member
Thread Starter
 
Join Date: Mar 2006
Location: NC
Posts: 813
Likes: 0
Received 47 Likes on 31 Posts
Default LLC Operating Agreement

Short version of a long story....

My wife started an LLC with her brother to flip a house. I am not in the LLC as a partner.

I did a lot of work in the flip, he has never stepped foot in the house.

My wife got defensive when I told her that we should bill the LLC for my work before profits were split.

She says it's not in the operating agreement.

So I just did the work 48% for her brother?

Am I wrong to have such a hard time with this? I told her I won't step foot in the next house without getting "paid". (Yes, all of our assets are shared and I realize that I benefit from the successful flip).
Old 08-27-2015, 03:41 AM
  #2  
Admirals Club Admiral's Club Member
 
Join Date: Jun 2009
Location: Vero Beach, FL
Posts: 7,555
Received 1,575 Likes on 842 Posts
Default

Maybe not labor but definitely materials. If the labor is significant, should at least be a topic of discussion.
Old 08-27-2015, 03:55 AM
  #3  
Senior MemberCaptains Club Member
Thread Starter
 
Join Date: Mar 2006
Location: NC
Posts: 813
Likes: 0
Received 47 Likes on 31 Posts
Default

Probably have 80+ hours in.

Majority of demo, including kitchen gut and some wall removal.

100% of electrical, including all new receptacles, switches and fixtures.

90% of rough carpentry.

A lot of pool work.
Old 08-27-2015, 04:15 AM
  #4  
Senior MemberCaptains Club Member
 
Join Date: Sep 2006
Location: Central FL
Posts: 1,698
Received 314 Likes on 163 Posts
Default

Will the proceeds of the sale not be used by both you and your wife?

If she makes $20K on the sale, I'm sure you will get to enjoy some of it.
Old 08-27-2015, 04:45 AM
  #5  
Senior MemberCaptains Club Member
Thread Starter
 
Join Date: Mar 2006
Location: NC
Posts: 813
Likes: 0
Received 47 Likes on 31 Posts
Default

Money stays in LLC.
Old 08-27-2015, 04:54 AM
  #6  
Senior Member
 
Join Date: Jul 2013
Posts: 1,362
Likes: 0
Received 44 Likes on 12 Posts
Default

Originally Posted by rit.05 View Post
Probably have 80+ hours in.

Majority of demo, including kitchen gut and some wall removal.

100% of electrical, including all new receptacles, switches and fixtures.

90% of rough carpentry.

A lot of pool work.
I'm not sure why you would do all of that work without an understanding re compensation.;? Eat this one and make sure you get paid next time.
Old 08-27-2015, 04:57 AM
  #7  
Admirals Club Admiral's Club Member
THT sponsor
 
triumphrick's Avatar
 
Join Date: Aug 2008
Location: Masaryktown, Fl
Posts: 19,152
Received 4,936 Likes on 2,185 Posts
Default

Did the brother finance this deal?

How was he involved?
Old 08-27-2015, 05:17 AM
  #8  
Senior MemberCaptains Club Member
 
Join Date: Oct 2007
Location: Fort Lauderdale
Posts: 12,909
Received 1,454 Likes on 662 Posts
Default

why not ask the other member of the LLC.

If they say no - then u know how to proceed on the next one

To be honest these are issues to discuss before doing the deal.

Good luck
Old 08-27-2015, 05:21 AM
  #9  
Senior Member
 
Join Date: Oct 2007
Posts: 10,161
Likes: 0
Received 1,745 Likes on 860 Posts
Default

Originally Posted by rit.05 View Post
Short version of a long story....

My wife started an LLC with her brother to flip a house. I am not in the LLC as a partner.

I did a lot of work in the flip, he has never stepped foot in the house.

My wife got defensive when I told her that we should bill the LLC for my work before profits were split.

She says it's not in the operating agreement.

So I just did the work 48% for her brother?

Am I wrong to have such a hard time with this? I told her I won't step foot in the next house without getting "paid". (Yes, all of our assets are shared and I realize that I benefit from the successful flip).
Was there ever a commercial agreement between you and the owners (LLC0)to do the work?

Seems to me you volunteered your time.
Old 08-27-2015, 05:36 AM
  #10  
Senior MemberCaptains Club Member
Thread Starter
 
Join Date: Mar 2006
Location: NC
Posts: 813
Likes: 0
Received 47 Likes on 31 Posts
Default

I made some assumptions about the business sense of the parties involved, my mistake.

If I was paid, my wife and I would make more on the project. It only makes sense.

Her brother only put in enough to partially finance. He never did any labor, which he verbally agreed to do.

Fool me once....
Old 08-27-2015, 05:39 AM
  #11  
Senior MemberCaptains Club Member
 
Join Date: Oct 2007
Location: Fort Lauderdale
Posts: 12,909
Received 1,454 Likes on 662 Posts
Default

Btw - who is the manager of the LLC - should be defined in the agreement.

I would simply put in a reasonable invoice and see what happens. There are polite ways to ask for compensation
Old 08-27-2015, 05:40 AM
  #12  
Admirals Club Admiral's Club Member
 
Join Date: Nov 2009
Location: Tarpon Springs, FL
Posts: 8,809
Received 4,113 Likes on 2,342 Posts
Default

Assumptions are a bad idea; in any partnership there should be specific responsibilities and specific compensation. And specific remedies to resolve issues like this.
Old 08-27-2015, 05:41 AM
  #13  
Senior Member
 
Join Date: Jun 2009
Location: Lake Murray, SC
Posts: 4,310
Received 220 Likes on 119 Posts
Default

You are wrong to give her a hard time with this one. Next time make sure what is going on up front. Sounds like the real issue is that the brother did little on the project and is not really needed. Is your wife keeping him involved in flipping to help support him?
Old 08-27-2015, 05:42 AM
  #14  
Senior Member
 
Join Date: Jun 2011
Location: Folly Beach, SC
Posts: 1,808
Likes: 0
Received 70 Likes on 44 Posts
Default

When she says it is not in the operating agreement, I bet she is referring to a partnership interest for services contributed. (DR Guaranteed Payment; CR Capital)

I bet there is no mention that you can't hire people to do work on the place. That would make no sense. I agree that this should have been handled before work was started but should be able to be handled easily.
Old 08-27-2015, 05:45 AM
  #15  
Senior Member
 
freeporttuna's Avatar
 
Join Date: Apr 2009
Location: Long Island
Posts: 9,901
Likes: 0
Received 4 Likes on 4 Posts
Default

So you're out materials and labor and bil gets same share of the profits.

Your wife is defending her brother when you deserve to be compensated.

I had similar issues with my wife. Her family always came before me. That's why she's my ex wife.
Old 08-27-2015, 06:08 AM
  #16  
Admirals Club Admiral's Club Member
 
Join Date: Aug 2010
Location: GA
Posts: 374
Received 44 Likes on 22 Posts
Default

I'm sure the LLC paid for the material. Right OP?

If you put in 80 hrs and BIL did not, his wife or partner did not, then you should be compensated above your wife's portion of proceeds from the sale. If you put in 80 (on behalf of your wife) and BIL put in 80, I would say you should not be compensated. If he was financing deal and the ownership was 50/50, I would say you should not be compensated.
Old 08-27-2015, 06:14 AM
  #17  
Senior Member
 
Join Date: Jan 2006
Location: Sunny florida
Posts: 25,531
Received 5,509 Likes on 3,522 Posts
Default

File a construction lein on the property.
Old 08-27-2015, 06:15 AM
  #18  
Senior MemberCaptains Club Member
 
Join Date: Oct 2007
Location: Fort Lauderdale
Posts: 12,909
Received 1,454 Likes on 662 Posts
Default

Originally Posted by rit.05 View Post
I

If I was paid, my wife and I would make more on the project. It only makes sense.

..
No - if you were paid "you" would make some money ....

The members would still distribute the net profits as stated in the agreement..

You are not a member of the LLC ...

Old 08-27-2015, 06:30 AM
  #19  
Senior Member
 
Join Date: Oct 2007
Posts: 10,161
Likes: 0
Received 1,745 Likes on 860 Posts
Default

Originally Posted by billinstuart View Post
File a construction lein on the property.
No can do if he has no contract with the LLC, which, it appears he does not.
Old 08-27-2015, 06:31 AM
  #20  
Senior Member
 
Join Date: Aug 2014
Location: Hanahan, SC
Posts: 8,428
Received 1,582 Likes on 1,006 Posts
Default

Originally Posted by Trollin4Tuna View Post
When she says it is not in the operating agreement, I bet she is referring to a partnership interest for services contributed. (DR Guaranteed Payment; CR Capital)

I bet there is no mention that you can't hire people to do work on the place. That would make no sense. I agree that this should have been handled before work was started but should be able to be handled easily.
This...not really sure what an operating agreement has to do with hiring anyone or paying anyone to render services.

Thread Tools
Search this Thread

Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service - Do Not Sell My Personal Information -

Copyright © 2021 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.