Trying To Force A Buy Out

[AUsher]

My former business partners and I own a property where we conducted our medical practice, as well as rented out to other medical professionals. Since I retired, the rental income has dried up, and I am now on the hook for my share of the mortgage payments. The other partners refuse to buy me out. What is my recourse? I want to be free of the payments, and reclaim what equity I have in the property.

 

[TigerD]

You didn't say what state you are in. You will need to talk to an attorney about a partition action. It will force the property to be sold and equity split between the owners.

TD

 

[AUsher]

My apologies. Delaware. The others do not want to sell the property. They just don't want to buy y share.

 

[quincy]

My apologies. Delaware. The others do not want to sell the property. They just don't want to buy y share.

They won't have a choice if you file a partition action.

 

[quincy]

Here is a link to Delaware's partition proceedings:
http://delcode.delaware.gov/title25/c007/sc02/index.shtml

 

[AUsher]

got it. Thank you for your help.

 

[quincy]

got it. Thank you for your help.

You're welcome. We appreciate the thanks. Good luck.

 

[Litigator22]

My former business partners and I own a property where we conducted our medical practice, as well as rented out to other medical professionals. Since I retired, the rental income has dried up, and I am now on the hook for my share of the mortgage payments. The other partners refuse to buy me out. What is my recourse? I want to be free of the payments, and reclaim what equity I have in the property.

You need to be made aware that there's both an up and down side to petitioning to the court to partition/sell the jointly owned property.

For you the favorable aspect is that it can be done irrespective of any objections from the non-petitioning owners.

The bad side is that ultimately the property would be sold to the highest bidder by a court appointed trustee. In other words, at a public auction. * Plus at considerable cost in attorney fees, court costs, commissioners fees, trustee's fee, etc., etc.,)

However, the down side is seldom if ever experienced. And very unlikely to be experienced in your case. Why so ?

Because it is totally impractical. Meaning your recalcitrant co-owners would have to be blooming idiots to allow it to go on the auction block where the only bidders would be people looking to steal it! Yet what each might realize from the sale would be further reduced by the tremendous legal costs. Expenses that they must bear proportionately.

So what to do? What you do is to have your attorney make a written demand on the others to either (1) cooperate in promptly disposing of the property at fair market value, or (2) suffer the consequential loss from a court order that it be put on a public auction block.

(There are of course a number of incidental but crucial elements to be taken into account as a part of and in formulating a binding agreement for the sale; all of which I won't but your attorney will explain.)


[*] Delaware Code Title 25 Chapter 7 Subchapter 11. Section 729

 

[xylene]

OP also needs a careful review of his partnership agreement. A lawyer is a must.

 

[quincy]

.. So what to do? What you do is to have your attorney make a written demand on the others to either (1) cooperate in promptly disposing of the property at fair market value, or (2) suffer the consequential loss from a court order that it be put on a public auction block.
...

Great advice, Litigator. I would add a third option to the demand letter that the other owners can buy from AUsher his share in the property.

I agree with xylene that AUsher will want to have an attorney.

 

[xylene]

I'm going to add OP needs to be prepared that they might not be owed any money, and might actually be on the hook for plenty more, depending on the financial agreement and condition of the property. This is mortgaged property. It could be underwater, it could be decrepit (a real possiblity since it has lost tenants) or subject to other encumbrances or issues. All this is why it is imperative his own lawyer reviews the situation and exactly what he agreed to in his partnership docs.

Many doctors have found that 'retiring' was not a financial windfall and subjected them to many legacy costs and expenses for winding down their role in a practice.

And bbe prepared for partners to be TOTALLY unreasonable and not respond to rational arguments with anything but "BRING IT ON" - For every doctor who retired, there are plenty of other partners who find they've lost a key member of the team and resentful that cost now have to be split one fewer way who ae willing to squable

 

[LdiJ]

My former business partners and I own a property where we conducted our medical practice, as well as rented out to other medical professionals. Since I retired, the rental income has dried up, and I am now on the hook for my share of the mortgage payments. The other partners refuse to buy me out. What is my recourse? I want to be free of the payments, and reclaim what equity I have in the property.

You have gotten good advice from the other posters, but what about the possibility of you subletting the space that you occupied to another doctor?

 

[quincy]

You have gotten good advice from the other posters, but what about the possibility of you subletting the space that you occupied to another doctor?

While an idea to consider, perhaps, it doesn't help AUsher with his goal to reclaim his equity in the property.

 

[AUsher]

Once again, Thank you for this great advice. It has been very helpful and has given me a lot to think about. I am very grateful.

 

[LdiJ]

While an idea to consider, perhaps, it doesn't help AUsher with his goal to reclaim his equity in the property.

True, but he won't lose his equity in the property either...and it would help relieve him of the financial burden for his share of the mortgage.

I don't disagree that he could force the sale of the property and if his former partner's aren't stupid it won't come to a partition sale. However based on how a doctor's office is set up and equipped, they likely need the property more than anything else, so the goal should be to convince them that its in their best interest to buy the OP out.