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Title Requirements for Trust and Operating Agreements

Many property owners choose to hold title in trusts. It is also not unusual for limited liability companies (LLCs) to hold title to property. While these are common ways to hold title, the requirements for transferring title need to be followed carefully to ensure property vests correctly, both to insure the marketability of title and to avoid future legal consequences.


Trust Agreements
In Colorado, there are two ways for a trust to take title to real property: in the names of the trustees of a named trust or in the name of the trust itself. In both instances, a Statement of Authority must be already recorded, or recorded with the vesting deed.


According to Colorado statute, the proper way to evidence the existence of a trust is by recording a Statement of Authority. The Statement of Authority contains the following information:

  • The name of the trust.
  • The state under whose laws it was created.
  • The mailing address for the trust.
  • The name and position of the person(s) authorized to execute instruments affecting title to real property on behalf of the trust.

The Statement of Authority must be recorded in the county where the property is located.


When insuring a transaction with a trust as the seller or buyer, the title company will require review of relevant portions of the trust agreement to confirm the name(s) of the trustee(s) authorized to act on behalf of the trust and the accuracy of the Statement of Authority.


If the trustee of a trust is deceased, incapacitated, or unwilling or unable to act on behalf of the trust, the Trust Agreement will be relied upon to determine who can act as the successor trustee.


The closing may be delayed if the proper people are not available to sign the documents as specified in the Trust Agreement.
A new affidavit or statement of authority must be executed and recorded if there is any change to the trust agreement, including withdrawal of a trustee, addition of a trustee, or death of a trustee.


If no Trust Affidavit or Statement of Authority exists for how title is vested, the title commitment will show a requirement for a Statement of Authority to be recorded at closing to place evidence of the trust’s authority on record.

Operating Agreements
The existence of a Limited Liability Company is determined by the stamped Articles of Organization filed with the Secretary of State. The authority of the members and managers to bind and convey real property is determined by the Operating Agreement.

When insuring a transaction with an LLC as the seller or the buyer, the title company will require review of the relevant portions of the operating agreement. This review is vital to confirm which manager or member or manager/member can execute instruments affecting title to real property on behalf of the LLC.

For Limited Liability Companies without an Operating Agreement, all members and managers will need to sign the closing documents.

If there is no Operating Agreement, or if circumstances require deviation from the terms of the Operating Agreement, the title company will require a Statement of Authority to be recorded. The Statement of Authority contains the following information:

  • The name of the LLC.
  • The state under whose laws it was created.
  • The mailing address for the LLC.
  • The name and position of the person(s) authorized to execute instruments affecting title to real property on behalf of the LLC.

The Statement of Authority must be recorded in the county where the property is located.

It is imperative that all documents be signed in accordance with the directives in the Operating Agreement. If the proper people are not available to sign the documents, the closing may be delayed.

Disclaimer: This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal or accounting advice or other expert assistance is required, the services of a competent professional should be sought.
© Copyright, 2011, by Land Title Guarantee Company