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Writer's pictureJonathan Klunk

Understanding Corporate Resolutions in Real Estate Transactions

What is a Corporate Resolution?

A corporate resolution is a formal written document that outlines the decisions made by a corporation's board of directors or shareholders. It serves as an official record of the actions and intentions of the corporation and provides authorization for specific actions to be taken. Corporate resolutions are typically used to document important decisions that affect the corporation's operations, finances, or legal matters.

Corporate resolutions can take various forms, such as written resolutions passed during board or shareholder meetings. They typically include details such as the resolution date, the names of the individuals or entities involved, the specific decision being made, and any conditions or contingencies associated with the decision.


Corporate resolutions may be required by law or third parties, such as banks, title companies, or government agencies, to ensure that the corporation has authorized actions. They provide a formal and legal record of the corporation's decisions and help establish the validity and authority of those decisions.


Examples of decisions that may be documented in a corporate resolution include authorizing the purchase or sale of real estate, authorizing the lease or rental of properties, authorizing the corporation to obtain mortgages or loans, appointing officers or directors, approving financial transactions, or making changes to the corporation's bylaws or articles of incorporation.


Who Needs to Use a Corporate Resolution?

Any corporation that engages in real estate transactions may need to use a corporate resolution. This includes corporations buying or selling real estate properties, leasing or renting properties, obtaining mortgages or loans, or making other significant real estate-related decisions.

In most corporations, the board of directors or the shareholders make decisions related to real estate transactions. As elected representatives of the corporation, the board of directors is responsible for managing the corporation's affairs and making important decisions on its behalf. On the other hand, shareholders are the corporation's owners and may also be involved in certain decisions depending on the corporation's bylaws and structure.

What is a Corporate Resolution Used for in Real Estate Transactions?

Corporate resolutions are used in real estate transactions to provide authorization for specific actions that may be required by law or by third parties involved in the transaction. Some common uses of corporate resolutions in real estate transactions include:

  1. Authorization to Buy or Sell Real Estate: A corporate resolution may authorize the purchase or sale of real estate properties. It outlines the transaction details, such as the property's description, purchase price, and any conditions or contingencies.

  2. Authorization to Lease or Rent Real Estate: A corporate resolution may authorize the lease or rental agreement if a corporation leases or rents a property. It specifies the lease or rental terms and conditions, including the rent amount, duration, and any other relevant terms.


3. Authorization to Obtain Mortgages or Loans: Corporate resolutions may also authorize the corporation to obtain mortgages or loans for real estate transactions. They outline the loan terms, including the amount, interest rate, and repayment terms.



4. Authorization for Legal Actions: In some cases, a corporation may need to take legal actions related to real estate transactions, such as filing lawsuits, entering into settlement agreements, or granting power of attorney. Corporate resolutions may be used to authorize these legal actions.


5. Compliance with Third-Party Requirements: Corporate resolutions may be required by third parties, such as banks, title companies, or government agencies, as part of the due diligence process in real estate transactions. These third parties may require a corporate resolution to confirm that the corporation has authorized the actions being taken in the transaction.


Below is a sample corporate resolution to authorize the sale of real estate.

Disclaimer: The information provided in this blog post is for general informational purposes only and should not be construed as legal advice. It is not a substitute for consulting a qualified legal professional for specific legal questions or guidance. Laws and regulations related to corporate resolutions and real estate transactions can vary by jurisdiction and may change over time. The use of corporate resolutions in real estate transactions should be done in accordance with applicable laws and regulations, and it is recommended to seek the advice of a qualified legal professional for personalized guidance. No attorney-client relationship is created by reading or relying on the information in this blog post. The author and the website do not assume any responsibility for any actions taken or not taken based on the information provided in this blog post. Always consult a qualified legal professional for proper legal advice tailored to your situation.


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