Estate Planning, Trusts
And Probate

Real Estate Transactions


Real Estate Investor's Lawyers in California - Help with Partnerships

Legal Representation: Dealing with Partners and Investors

At Lerman Law Partners, we help California commercial real estate investors at every point in the cycle of ownership of real estate. This includes that point when two or more investors come together. At that point, it is critical that they adequately discuss and document all the terms and conditions of their joint venture.

One of the most frequently overlooked issues in investor partner negotiations is the exit strategy or the “buy-sell” provision.

The attorneys at Lerman Law Partners strongly recommend that, whenever there are two or more parties in an ownership entity, a buy-sell agreement be negotiated and documented to ensure that everyone is fairly treated.

Buy-Sell Agreements

A buy-sell agreement provides for the acquisition of the interest of a withdrawing partner by the business entity or its remaining principals. The agreement usually restricts the owners’ ability to transfer their interests. The agreement provides the terms under which the entity may or must acquire the interest of a partner upon retirement or death or other events that may trigger a buyout.

“Any time you have any kind of business ‘marriage,’ when money gets tight then troubles can come,” Mr. Lerman said. Generally, the 12 warning signs he has seen threaten a partnership, limited liability company, tenancy-in-common or other structure result from the partners not having deep discussions before the venture and periodically thereafter as well as not detailing the agreed to terms on paper. — Attorney Jeffrey H. Lerman in The North Bay Business Journal

Our lawyers recommend a buy-sell agreement for investors and their partners for commercial ventures as well as family businesses. Benefits include:

  • Preventing outsiders or heirs who may have conflicting interests from obtaining an ownership interest
  • Continuity of management and control by the remaining owners
  • Providing for the orderly liquidation of the owners’ interests in the event of retirement, death or other withdrawal
  • Preventing continued involvement in the business of retired or inactive partners
  • Creating a market for the shares of the withdrawing partner
  • Specifying the price to be paid for a partner’s or shareholder’s interest
  • Providing cash to pay death taxes and estate settlement costs
  • Fixing the value of the interest for estate and gift tax purposes

Count on the law firm devoted to real estate investors. Contact us today. We have offices throughout California in San Rafael and San Francisco.

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