Rather than get charged by my attorney I figured I would see what kind of response I get here first from all my knowledgeable peers.
I own a property 50/50 with someone and my name is on the LLC and on the mortgage. I essentially "gave" this certain someone the property. What I mean by that is he would be 100% responsible for everything IE: mortgage, insurance, maintenance, etc. Net rental income would be his. Here's where things get ugly.....
Property was refinanced back in July 2014 and has been sitting vacant since, he has been covering the mortgage, so great. I have found a qualified tenant who agrees to pay what MY asking rental price is. Now the "someone" seems to think that this place is worth more (which it may be but not much) but he hasnt been able to find a tenant. Clearly its a price issue. My question is this....
If I meet the potential tenant, get the lease signed, accept security deposit, and hand over keys, is there anything that this "someone" can do since I am 50/50 owner and am just as much financially responsible as he is and even more importantly can he do anything to the tenant once the lease is singed?
I'm confused...you said that your name is on the LLC and the mortgage, but you "gave" him the property.
What does that mean?
Answer these questions:
- Who (or what company) is on title for the property?
- Assuming the company is on title, who are the owners of the company and in what percentages?
- How exactly did you "give" this person the property (or a stake in the property)?
- What written agreements do you have with this other person?
everything is explained in my first post
property deeded in LLC that we both are 50/50 members of
"I essentially "gave" this certain someone the property. What I mean by that is he would be 100% responsible for everything IE: taking care of mortgage, insurance, maintenance, etc. Net rental income would be his."
Maybe gave wasnt the right but he would treating the property as though it was 100% his.
No written agreements
essentially my thoughts are this
I am 50% owner of property
I am financially responsible for the property
I can rent it to whomever I want for whatever price I want without his permission.
Once tenant is in place there is nothing he can do
If they have 50% ownership with no written agreements, why would he treat it as 100% his? I understand that you feel you "explained" it all in your first post. I certainly don't understand the situation, why would you give the rental to someone.
If it is 100% his, why do you care about finding a tenant? See? Doesn't make sense.
Its not 100% his, forget about all that and we will make it simple, its kinda irrelevant to my question anyway not looking at.
If I am 50% owner, do I have the right to do as I see fit with property as long as it is in my best interest or the best interest of the llc?
I have a tenant in place for a property I own with my partner, my partner seems to think he or we can get more. The place has been vacant since July of this year. I have a tenant lined up to rent it for less than what he believes we can get. I want to get the lease signed and property rented without his so called "approval" can I do this since I am owner and on the mortgage?
@Mike Parks I would say no since you are 50% and not 51% but I would talk to a lawyer.
You need to sort this out with the help of a competent attorney. You and your partner need an operating agreement. You also need to learn more about landlording too, as once you start involving tenants the stakes go up. Please learn as much as you can from Bigger Pockets and other reliable resources. Good luck.
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