Investor Representation
The legal problems that damage a property portfolio are structural. They are built in at formation and only become visible when a partner leaves, a tenant sues, or a lender asks a question.
Investors accumulate property faster than they accumulate paperwork. Parcels get bought in whatever entity was convenient, partnerships operate on conversations rather than agreements, and the same lease gets reused across a dozen units without anyone reading it since the first one. It works until it does not.
The firm advises investors and property owners on how holdings are structured, on the documents the portfolio actually runs on, and on the disputes that arise between co investors and with tenants, contractors and neighboring owners.
How holdings are held
How title is held affects liability exposure, financing, transferability and what happens on death or divorce. These are decisions with long consequences that are frequently made at a closing table under time pressure.
- Whether property is held individually, jointly, in an entity, or in trust, and why
- Separate entities per property against a single holding entity, and the tradeoffs in liability and cost
- Operating agreements that actually address deadlock, exit, valuation and death of a member
- Whether the formalities that preserve limited liability are being observed in practice
- Transfers between entities, and the property tax and title consequences of moving property around
- Financing and guaranty structure across multiple properties
- Succession, so the portfolio can pass without a forced sale
Two people buying a rental together rarely paper what happens when one wants out, one stops contributing, or one dies. Without an agreement, the default answer is often a partition action, which means a court ordered sale of an asset neither of them wanted to sell.
Documents the portfolio runs on
An investor with more than a few doors is running a business on a small number of repeated documents. Getting those right once produces returns across every unit, and getting them wrong replicates the same defect across the portfolio.
When co investors fall out
Partnership disputes over property are among the most difficult matters in this practice, because the parties usually know each other well and the asset cannot easily be divided. Common triggers are one party stopping contributions, disagreement about whether to sell or refinance, a party taking distributions or management fees the others did not approve, and the death or divorce of a co owner bringing a new party into the arrangement.
Where an agreement exists, it usually controls. Where none exists, the routes are negotiation, a buyout at an agreed or appraised value, or a partition action asking a court to divide or sell the property. Partition is a real remedy and its availability often produces a negotiated resolution once the other side understands it exists.
Questions from investors
Should each property be in its own entity?
It depends on the size of the portfolio, financing, insurance and how much administrative cost is tolerable. Separate entities can limit exposure between properties. They also multiply filings, accounts and lender requirements. The answer for four rentals is often different from the answer for forty.
My partner and I never signed anything. Is that a problem?
It is a problem that stays invisible until it is expensive. Without an agreement there is no mechanism for exit, valuation, deadlock or death, and the fallback is frequently a partition action forcing a sale. Papering it while everyone still agrees costs a fraction of resolving it later.
Does an entity protect me personally?
It can, if it is respected in practice. Commingling funds, ignoring formalities and signing personally undermine the protection. Many investors also sign personal guaranties on financing, which puts them personally at risk regardless of the entity.
Can I move a property I own into an LLC?
Usually, though it needs care. Consider the due on sale clause in any mortgage, title insurance coverage after transfer, and the property tax consequences of a transfer of ownership in Michigan. Some transfers are exempt from uncapping and some are not, and that distinction has real cost.
Structure it while everyone still agrees.
[PHONE]Matters with a closing date, a filing deadline or a hearing already on the calendar are handled by phone.