Real Estate Title Services Involving Partnerships
When you want to partner with another entrepreneur to purchase and occupy the same office building, how does that work? Real estate title services involving partnerships add a new dimension to the property purchasing contract and a special set of requirements. If you are thinking about partnering with someone else to buy an office building, occupy it jointly, and operate your businesses separately, here is what you need to know and consider.
The Titling Services Will Place Ownership Titles in Both Your Names
Because you and this new partner are neither related by birth or marriage, the title service company needs to draw up contracts in both your names. The purchase and title contracts stipulate exactly the same things, except for your names and the names of your businesses that will be operating out of the building. Then you will both sign the individual contracts and possibly a joint title contract that shows your partnership in the property but not in the businesses themselves.
If You Want to Sell Your Half of the Property, Your Choices Are Limited
If in the future your business goes belly-up or you decide to quit and want to sell your half of the business property, you will have limited interests. You could offer it to the partner and his/her business, if he/she wants the entire building. You could also find a replacement partner to share the property costs, but the partner would have to agree to this or find his/her own partner to fill the void and make the monthly payments.
Each state does it a little differently, too. So read your property title carefully before you try to exit this financial responsibility. Additionally, you cannot sell off or liquidate your share of the property in a bankruptcy because your partner still owns his/her share of the property.
Selling Your Half of the Property Means a Whole New Set of Titling Services
If and when you want to sell your half of the property, you will need another title services company and a whole new set of titling services. You, the new property owner/partner and your old property partner all have to meet with a titling agent to sign paperwork. Several new documents are drawn up and signed by everyone, and then the transfer of property from you to the new property partner begins. It is a complicated process, so be sure that you even want to get into a property partnership first.
For more information, contact local professionals like TitleSmart.