Partnership gone bad

[Steven Myers]

I am relatively new here an haven't posted but I have run accross an issue on one of my properties.

I bought a property with a partner and it is just now being rented out this month. He has more experience with rentals so I decided to let him take the lead but now he is wanting to charge me a 37.5% of the rent to find the tenants and 5% a month. I never agreed to neither fee, but I agree he should be compensated some but not at the level of a property management company because he is not that. If I would have known he was going to do that I would have leased the property myself as I have a couple of rentals. What are my options? I have tried to negotiate with him but he says it is final. Are my only options is taking him to court. Also, he put the leases in his name only and never ran the tenants by me so I have no clue who is in the property.

Thanks for any help.

[Jon Holdman]

Originally posted by Steven Myers:

We don't have any agreement in place, mostly because we were good friends and never thought it would be an issue this early.

AAARRRG! A serious error. The time to sort this out is when you're friendly and think nothing can go wrong, not when it actually has.

The fees he's charging are not unreasonable for a PM. Around here is 10% of collected rents plus half a month to fill a vacancy. If he's doing 100% of this work and you're doing none of it, then he is, arguably, entitled to this money. However, these fees should be charged to the property. Then you two should split what's left 50/50.

OTOH, him changing the rules when the deal is underway is a very, very bad sign. I'd figure a way out of this deal ASAP.