I own a small property in Chapel Hill, NC. My tenants formed an LLC and signed the lease as such. The person who signed the lease was an ori...

Question

I own a small property in Chapel Hill, NC. My tenants formed an LLC and signed the lease as such. The person who signed the lease was an original member of the LLC.

However, when they filed an annual report a year later, he was no longer listed as a member of the LLC. Then the LLS was administratively dissolved for not filing their latest annual report.

The tenants later vacated the property owing me 8 months rent. They also caused damage to the property while removing their equipment. I estimate total damages of $36,000 in unpaid rent plus app. $15,000 in damage to the property.

My question is - can I sue the original member of the LLC who signed the lease? Did he lose his LLC protection when he no longer appeared on the last LLC annual report fled in January, 2011?

Answer

There is no black and white answer. You may want to consult with an attorney but essentially to hold individuals liable you would need to pierce the corporate veil. While this may be possible, it is complex and the individual may have a whole host of defenses.

Answer

Mr. Roser is correct, I urgently advise you to speak to an attorney. In the future, the best way to deal with this is to have the LLC sign and have one or more of the managers sign individually.

In NC, scores of people form LLC's that fail quickly all of the time. It is best to have the individual members held liable on the face of the agreement.