If a partnership ownsrentalproperty and one of the partners is pocketing the rents, what legal recourse does the partnership have?
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If a partnership ownsrentalproperty and one of the partners is pocketing the rents, what legal recourse does the partnership have?
We own 2 homes in GA with a partner. When we bought the home, the partner in question was supposed to collect rents and then pay the mortgages. After about a year, the partner was strated to pocketing the rents. We ended up paying the mortgages and late fees out of our own pockets. My husband ended up taking over paying the mortgages but the partner still collects rents and is supposed to remit to us. However they have now again started pocketing the money. What legal recourse do we have? Should we speak to a real estate attorney? In Litchfield County, CT.
Asked on October 3, 2010 under Real Estate Law, Connecticut
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 14 years ago | Contributor
Is this partnership agreement written down somewhere? It should be for future reference but may not be fatal to your case here. You have to go to court and sue the other partner for breach of the agreement, file embezzlement charges, and do whatever else is necessary to have hm stop his behaviour and to recoup the monies that you lost. It may be a good idea to send a notice to tenants to refrain from paying him and to set up an account in the courthouse for them to pay their rent in to court until the matter is resolved (ask your attorney if the court allows withdrawing funds to pay the mortgages, etc.). Do you have business accounts, etc.? I would definitely seek legal help in all of this. Good luck.
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