Property business pre-nups can stop family feuds

by Property118.com News Team

15:42 PM, 9th May 2012
About 6 years ago

Property business pre-nups can stop family feuds

Make Text Bigger
Property business pre-nups can stop family feuds

Money and blood often don’t mix – which is why so many families go to war over their ‘fair share’ of cash.

With so many wealthy business people and celebrities drawing up marriage pre-nups, perhaps the time has come for property business partners to consider the same deal.

Most property partnerships start on good terms and work towards a common goal of generating profits and cash – but some turn sour and the partners regret they have no exit strategy.

A loose, verbal agreement really does not go far enough for a property business that can soon chalk up an asset base of £1 million or more.

Many business partners may happily work together without disagreement for years, but if they do not plan for the death of a partner, divorce or other unforeseen circumstances like serious illness, then dividing the spoils can trigger serious arguments.

Misunderstanding and distrust in a property business can soon arise because two or more partners think they have an agreement, but their interpretations of the actual terms and conditions are often very different.

A good business pre-nup will go along way to avoiding family feuds.

Some of the points to consider when drawing up an agreement

  • Voting on key issues
  • Who is responsible for keeping records, licences and insurances up to date
  • How much each partner should contribute to costs
  • What happens if the property partnership breaks up
  • What happens on the death of a partner
  • Giving a buy-out option to the other partner(s) if someone decides to leave the business

It’s important to remember that jointly owning property does not mean the business is a partnership in the same way as lawyers work in a practise, so the arrangement is more of a joint venture than a formal enterprise governed by the Partnership Act.

If in doubt about how to write a property business pre-nup, consider calling in a lawyer.



Comments

Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

OR

BECOME A MEMBER

Help calculating rents?

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More