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Business Formation Guide
protectionUpdated 2026-03-31

Can an LLC Own Real Estate in Texas?

Yes. A Texas LLC can own, purchase, hold, lease, and manage real property in its own name. The LLC is a separate legal entity under Texas Business Organizations Code § 101.001 et seq., which means it can acquire and hold title to real estate independently of its members. This structure provides liability protection and allows the LLC to conduct real estate transactions as a distinct business entity.

How Ownership Works

Your LLC automatically exists as a legal entity once its Certificate of Formation is filed with the Texas Secretary of State. This entity status allows the LLC to take title to real property in the LLC's name, enter into purchase agreements and financing arrangements, hold mortgages, lease property to third parties, and manage or dispose of real estate. Members are not personally liable for the LLC's real estate obligations or debts, provided the LLC is properly maintained as a separate entity.

Management Authority

By default, all members have equal management authority under Tex. Bus. Org. Code § 101.052. This means any member can bind the LLC to real estate transactions unless your operating agreement restricts this power. To prevent unauthorized property sales or encumbrances, specify in your operating agreement which members or managers have authority to buy, sell, lease, or mortgage real property.

Operating Agreement

While Texas does not require a written operating agreement, one is strongly recommended for real estate holdings. Your agreement should clarify how the LLC will manage and dispose of property, member voting rights on major real estate decisions, and profit and loss allocation. The default rule provides for equal sharing under § 101.052, but your agreement can customize this allocation based on capital contributions or ownership percentages.

Liability Protection

Texas LLCs provide charging order protection under § 101.112, which limits a creditor's remedies against a member's interest to a charging order—not a foreclosure on the LLC's assets, including real estate.

Series LLC Option

If you anticipate holding multiple properties with separate liability protection, a Series LLC under Tex. Bus. Org. Code §§ 101.601–101.636 allows you to establish separate series, each with its own assets and liabilities.

Next Steps

  1. File your Certificate of Formation with the Texas Secretary of State.
  2. Draft a comprehensive operating agreement addressing real estate management and member authority.
  3. Obtain an EIN from the IRS for financing and title purposes.
  4. Consult a title company before purchase to confirm proper vesting in the LLC's legal name.

This is general information, not legal advice.