How Do You Get Rid of a Deadbeat Partner?

[Paul Allen]

I had an initial consultation with a new client yesterday (I am a financial planner) and he has an issue with which I am not familiar. Thought I'd post it here to see if there is some practical advice I can share with him.

In 2007 he was persuaded (duped?) into purchasing an investment property by a real estate agent (REA) with the aim of starting a rental property partnership with the REA. The property is titled jointly to Client and REA. The mortgage is in Client's name only.

The REA is now a non-participant. Doesn't pay his half of the mortgage (as was agreed upon), doesn't return phone calls. Property is valued at roughly $125K. Mortgage balance roughly $141K. Property is vacant and needs work if it is to be rented again. (I don't know how much work.)

Client would like to sell the property and be done with it. His frustration level is through the roof. I'd say his next move is to lawyer up, but I wanted to see if anyone here has some insights on how to proceed and what to expect. TIA.

[Thomas S.]

Your client should offer to buy out the partner. Your client would then shoulder the loss after selling the property. He needs to cut his losses.

Next option is to lawyer up but this will likely end up costing him more in the long run.