How is a conflict resolved between two owners who are tenants in common ?

[Tiffanyy808]

Hawaii
I am one of two owners of a commercial property in Lahaina, HI. The tenant owns the lease until 2033. Rent negotiations are coming up, The properties other owner just informed me that he does not want to increase the rent for the next 10 years and fair market values run in the area of 3 to 4 times higher. The lease states that if the tenant doesn’t agree with the new rental amount, both sides hire an appraiser and there is a solution. But nothing in the lease states how to resolve a conflict between owners. The other owner is 90 years old and is mentally competent, but does not like sharing control of the property. if we cant come to an agreement what can I do? I don’t want to sell my share of the property, he owns 75 percent, I own 25 percent. We are tenants in common. How is this type of conflict resolved?

 

[adjusterjack]

If you can't agree, you sell. It's that simple and there's no in between. Your partner has the upper hand.

Either sell your share to the partner.

Or sell your share to somebody else.

Or Google "partition action."

 

[HRZ]

Or offer to buy his share ...before the rents get locked in place.

 

[Tiffanyy808]

Thank you for the advice. I appreciate it.

 

[HRZ]

AT 90 he might be more focused on getting "free" step up in basis on his holdings at death and paranoid about paying capital gains taxes ..there might be ways to structure around this..but for now try to sort out what motivates your co owner ..it's rare that one deliberately underprices a lease...but it can happen ...make him a HIGH offer based on the current modest rent flow .

 

[LdiJ]

AT 90 he might be more focused on getting "free" step up in basis on his holdings at death and paranoid about paying capital gains taxes ..there might be ways to structure around this..but for now try to sort out what motivates your co owner ..it's rare that one deliberately underprices a lease...but it can happen ...make him a HIGH offer based on the current modest rent flow .

I think its far more likely that he is focused on guaranteed income vs anything else. I disagree with AJ's notion that you agree or you sell, because it appears that the tenant has some sort of rights through 2033. The question is how much rent the tenant will have to pay.

I suspect that someone has convinced the 90 year old that the current rent is the maximum guaranteed income.

 

[HRZ]

IF that's the case, the OP might strike a deal with co owner to guarantee the current income if allowed to raise rents .