Problem Partnerships

No partnership, personal or professional, is perfect. Disputes over real estate investments are commonplace and resolving them can be both challenging and painful.

If you or one of your clients are faced with trying to get out of a real estate investment gone bad, it’s helpful to understand your litigation options.

There are a wide variety of problems that can arise between partners in real estate. While many are straightforward breach of contract actions, sometimes they are more complex, and the solutions involve more than seeking recovery of monies or property based on a contractual agreement.

Two of the more common types of real estate litigation are suits to quiet title and partition actions.

A suit to quiet title is a lawsuit whereby the plaintiff typically seeks a judicial determination as to who is the rightful property owner and that the opposing party (the defendant) has no form of ownership or encumbrance. The plaintiff is challenging what is referred to as a “cloud on title,” or an adverse interest which the plaintiff believes to be improperly affecting its title and ownership interests. This situation can arise, for example, when an investor attempts to assert rights by recording a lien against the investment property.

A partition action is the real estate equivalent of a divorce. If a partner wants out of a deal, but cannot exit because all of the money and interests are tied up in the real estate, that partner can file a partition action to force one of two general results: (a) the partner is bought out of the partnership; or (b) the real estate is sold and each partner is given equitable share of the net proceeds.

While this may sound simple, the reality is that these lawsuits are loaded with pitfalls and complications, including disputes over who will market, list and sell the property; claims of contributions outside of the partners’ written agreement; disputes over actual value of the property; accounting disputes; and on and on.

Erwin Law has been representing real estate investors for over twenty-five years and has the deep experience essential to protecting and prosecuting their client’s interests in these types of difficult lawsuits. For more information, visit http://erwinlawfirm.com or call (773) 525-0153.