Friendship rift results in partnership problem
Question: I purchased a rental property five years ago with a friend and things went well for a couple of years. We purchased the property 50-50, and my friend hired the management company to handle the rental. Over the past year, my friend and I had a disagreement and are no longer friends. He has been collecting all the rents from the property, but has not provided me with any funds or any accounting. Nobody is going to buy half of a house, so what can I do?
Answer: This issue comes up frequently, as many investors who purchased during the trough disagree whether to hold properties or sell them. As in most situations, I would recommend trying to resolve the dispute amicably, either informally or perhaps through a mediator. This method will typically save the most time and money for both of you.
If this method fails, you can look to the courts for assistance through the filing of a partition action. In a successful action, the property will typically be sold at auction, with the proceeds, as a starting point, being split 50-50. Within that matter, issues such as payments made and received can be taken into account, so that you may be entitled to more than a 50-50 split at the sale.
Florida statutes also provide for the payment of reasonable attorney’s fees and costs in certain situations. Considering the time and potential costs of a partition action, I hope you and your friend can work out an agreement and sell it, or for one partner to buy out the other’s interest. If not, I recommend you contact legal counsel for further advice on how to proceed.
Eric P. Feichthaler has lived in Cape Coral for 27 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as Mayor of Cape Coral from 2005-2008, and continues his service to the community through his chairmanship of the Harney Point Kiwanis Club KidsFest, which provides a free day of fun and learning to thousands of Cape Coral families, and funds numerous scholarships. He has been married to his wife, Mary, for 13 years, and they have four children together. Recently, he earned his board certification in Real Estate Law from the Florida Bar. He is also a Supreme Court Certified Circuit Civil Mediator.
This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.