Can a partner of a business purchase the corresponding real estate with out the other partner knowing?
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Can a partner of a business purchase the corresponding real estate with out the other partner knowing?
My brother owns a bar with a friend. They have recently discussed purchasing the real estate that the bar is on. My brother has recently gone through a bankruptcy, so they discussed doing an owner contract. My brother has regularly asked his partner how things were going, regarding the purchase of the real estate. Today we found out that the partner purchased the property without my brother knowing. Not sure if it was owner contract, a private contract or bank. Can the partner do this and if so, how high can he legally raise the rent?
Asked on July 20, 2011 Idaho
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
If what you are asking is if the partner can go behind your brother's back and purchase the property without him, yes, he can, unless there is an agreement to the contrary here. The partnership agreement may or may not speak to this issue (if there is a written agreement in place which I am assuming that there is) but I would doubt it. It is the lease agreement that I would look to. Is the lease signed by them as a partnership or a corporation? Does it give them the right of first refusal of the property? Please take the documents involved to an attorney to review. And yes, the owner can raise the rent but only pursuant to the lease agreement. Good luck.
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