Partner doesn't want to sell and I want to sell - what next?

Question

My partner and I hold property 50/50. I want to sell, she doesn't. We have operating agreement but it wasn't signed by either one of us, so I guess that is unenforceable.

What should I do? Should I force company dissolution?sa

Tyson Wade · Answer

Because there is no operating agreement governing this situation, you may consider entering into an agreement with your partner wherein the both of you agree to transfer the property out of the entity and into your respective names, as 50/50 tenants-in-common. This agreement should also address assumption of the debt, if your lender provides for this as an option, so you can transfer the debt to your partner, or at least add them as an additional borrower if possible.

Holding the property as tenants-in-common will allow you to sell your individual 50% ownership of the property to a buyer, while allowing your partner to retain their 50% ownership. If you maintain 50% of the debt after the change in ownership to this tenant-in-common structure, then you may consider including your 50% of the debt in your sale (again, if your lender allows for this). Ultimately, the lender may require the note to be paid off, which would require a refinance and change of borrower from yourself to your partner and/or the new owner of your old 50% share.

Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.

KC Ushijima · Answer

If there is not a signed operating agreement, it typically will default to the state rules for operating agreements.

So if it is a California LLC, you may want to review the California Revised Uniform Limited Liability Company Act (RULLCA) to see how it will handle disputes among the members/partners.

Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.

Joe S. · Answer

For all the people saying sell your interest in the LLC is missing the fact that the loan is still a liability to the OP. The OP is the main one that it is a concern for it appears….

Marija Petrovic · Answer

@Stephen Morales it is vacation rental home (or second home) we've used it for vacation time, family and Airbnb in winter during season.

House is in Big Bear CA Sugarloaf, about 1000 sqf, 2 bed 1 bath large living room area all remodeled. there is also adjacent lot as part of the property where another house can be built or sold as separate lot.

My agent said we could sell it for 375k, the remaining loan balance is 258k and I would ask for 40k buyout.

Loan is FHA with interest 2.448%, loan payment $1800 a month, and my agent said we could rent long term for $2100 a month.

Loan is assumable (already checked with the mortgage company) and my partner said she would coordinate with new buyer for either her to assume the loan or new potential partner.

Chris Seveney · Answer

Since you are on the mortgage, then the best avenue would be for her to buy you out and refinance you out of the deal. There really is no other way since you are on the mortgage as even if you sell your interest you are still on mortgage...

Jeremy H. · Answer

If you have an operating agreement that isn't signed by anyone...then you don't have an operating agreement.

You have 2 options the way I see it - stop contributing and let the place go into foreclosure (this is sure to burn a relationship but it may force a sale one way or the other) or sell your half.

What would the cost to buy you out be? Is buying you out a good money making opportunity? May make sense to sell to friends/family or even creatively finance your half to your "partner" so she can afford it.

Ashish Acharya · Answer

@Marija Petrovic If the operating agreement wasn’t signed, it may not be enforceable, which complicates things. Since you're 50/50 owners and there's no binding agreement outlining dispute resolution or buy-sell terms, you have limited options without mutual consent. One route is to propose a buyout, where either of you purchases the other’s interest. If that fails and you're truly at an impasse, you may need to pursue judicial dissolution—essentially asking the court to dissolve the partnership or LLC due to deadlock. Before going that route, it’s worth consulting with an attorney to explore buyout options, mediation, or whether the unsigned agreement holds any legal weight based on conduct or partial performance. From a tax perspective, a forced sale or dissolution can trigger capital gains and other tax consequences, so coordinating with a CPA is also smart. Let us know if you want help reviewing the tax side of a potential sale or exit.

This post does not create a CPA-Client relationship. The information contained in this post is not to be relied upon. Readers should seek professional advice.

Jared Stong · Answer

Find someone to buy out your half or ask her if she's willing to buy out your half

Stephen Morales · Answer

@Marija Petrovic,Thank you for providing that info. Let me see what I can come up with!

Partner doesn't want to sell and I want to sell - what next?

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