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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3666
Experience:  Solicitors 2 years plus PQE
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i have discovered in the partnership agreement , the pre amble

Customer Question

i have discovered in the partnership agreement , the pre amble defines the partnership rate as 0.5 % above our banks lending base rate for our accounts. I think this is 0.5 % so that would make it 1 5, am i correct?. The partnership agreement states that either the properties should be rented (we had a valuation in october last year which included a value for rent and purchase). Since i retired on 31/12/13 no rent or purchase has occoured.My partner wishes to purchase the property now, some 5 months later. 1. as this is a capitol amount does interest get added at 1 %? 2.is there any rent to be paid? 3. is the value of the equity due to me when my partner purchases my 50 % share of the business property depend on the outstanding loan value as at 31/12/2013 when final accounts were drawn up or the current value of outstanding loans? 4. The partnership agreement states that the valuation carried out by the commercial valuers on 14/10/13 shall be final and binding, but they state in the past 7 months since valuation was carried out, property has risen in value by between 5 and 10%, can and should the valuation be updated? Many thanks for your last awnser, it prompted a thorough search of the partnership agreement and i found the partnership agreement stated right at the start what the partnership interest rate should be, and that this should be reviewed annually. I cant see any interest added to the capitol accounts for the past 4 years that i have looked at so im not shore what to do about that ! I got me solicitor to email the accountant to ask what the partnership interest rate is (in case it was any different) and was there any rent to pay, 3 weks ago, like my emails there was no reply and his wife sent an email that they would be away on holiday for 3 weeks. I asked if they could respond to my solicitors email before they went on holiday, there was no response.
Submitted: 3 years ago.
Category: Law
Expert:  Alex J. replied 3 years ago.
Hi,

Thank you for your question and welcome.

My name is AJ and I will assist you.

Is this a straight forward partnership or an LLP?

Why was the partnership not dissolved when you retired?

Kind regards

AJ
Customer: replied 3 years ago.

The partnership is not an llp and was dissolved on 31/12/13

Expert:  Alex J. replied 3 years ago.
Thank you.

When you retired did you agree a structure for being paid out your capital and current accounts?

Kind regards

AJ
Customer: replied 3 years ago.

Syructire was in partnership agreement , either buy or rent property on retirement , have been waiting nearly 6 months for partner to buy property . Is rent due untill property is purchased . Partnership agreement doesnt say . Ot does say interest is due on capitol . Is property part of capitol ?

Expert:  Alex J. replied 3 years ago.
Hi,

Thank you.

The property is definitely part of the capital.

If the partnership was dissolved, you technically were never bought out, therefore you are entitled to a share in all the partnership assets.

Were you the only two partners?

Kind regards

AJ
Customer: replied 3 years ago.

Yes it was a50 50 perent partership with myself and my partner, my question is how is the property considered , is it the valuation as carried out on 14/10/13 ,or is there rent to pay because the property is only beeing boughtnow 6 months after i retired ?

Expert:  Alex J. replied 3 years ago.
Hi,

Thank you.

I would argue that the property is still a partnership asset until it is sold. If the partnership is dissolved then the partners jointly own the beneficial interest in it until it is sold.

If you feel that six months have gone by and therefore it should be revalued you are entitled to do this as you are beneficially entitled to the property.

I do not think however you can retrospectively charge rent unless there is some contractual provision in place for it.

I look forward to hearing from you.

Kind regards

AJ