Need some advice regarding sticky situation

5 Replies

Hi BPers,

My best friend got herself into a bit of a situation. I'm hoping someone can shed some light before she talks to an attorney who specializes in commercial real estate. My friend and a partner went into a 50/50 purchase of a commercial real estate. They never wrote up a partnership agreement of anything. It is one parcel, but 2 lots. Each person had their lot. My friend has rented her lot to a dry cleaning business owner. The partner never rented his space out. He kept it for his own personal use. My friend's lease agreement was up for renewal with her renter (the dry cleaning business). My friend wanted to sell the space and talked to her partner. He didn't want to sell that the time. So my friend drafted up the lease agreement and got it signed with her renter. My friend got the contract signed and it goes into effect January 1, 2018. My friend did not include his partner (who owns the other lot) because she didn't think she needed to since they each own and operate their respective lot. I think legally she needed to include her partner because the Deed is under both their names and it is one parcel. Unfortunately, now the partner wants to sell the space which leaves my friend in a bit of a bad situation. 

My friend's commercial space is in California. I don't know if her partner can sell his half of the lot without my friend selling her half since it is one parcel. Also, it doesn't sound like my friend executed the rental lease correctly since she never got her partner to sign the lease (I think the partner may have needed to legally, but I really don't know) Is there anything my friend can do to get out of this mess? I told her I would post on BP for her before she goes to a lawyer.

Thanks in advance!

Tell her to find a lawyer. There are far too many variables to rely on any advice on here.

@Helen V.  What do you mean by "It is one parcel, but 2 lots"?  If there are 2 lots that means there are two parcels. 

Contact a local real estate attorney. This sounds like an easy fix if the partners want to simply separate the parcels from common ownership and end their relationship. If there is a dispute, the one who wants out could likely bring an action for partition.

Same attorney could advise on the lease issue. Unfortunately I could argue it both ways so it will come down to pursuing a desired result.

This is a master class on how not to do something.

At this point a commercial attorney is needed and one maybe that has litigation experience if it gets that far.

You spend money in the beginning to set things up right going in. Much more expensive later on to fix problems that were created trying to do things on the cheap.

Good luck. No legal advice given.

Thanks! I did another post asking for Commercial R/E Attorneys recommendations.

Yep, lawyer and negotiation time. If it is “2 lots, 1 parcel, 1 deed” they both own 1/2 of the total. Maybe possible to subdivide but it will cost some money and probably won’t be quick.

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