I own a commercial property bought in 2008 with a friend we purchased the property with an llc my friend has not paid any taxes since 2016 and I have had to pay his portion. Does he loose his interest in the property?

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I own a commercial property bought in 2008 with a friend we purchased the property with an llc my friend has not paid any taxes since 2016 and I have had to pay his portion. Does he loose his interest in the property?

I have owned this property since 2008 buying in with
a llc formed by me and a friend.. my friend hasnt
contributed to his portion of the taxes and has left me
to pay his portion of the taxes from 2016 and 2018
and has not made an attempt to pay me back what I
paid. The property would have been foreclosed by
the lender if I had not paid the taxes for 2018 and Im
in jeopardy of losing the property because he cannot
pay the taxes or balloon payment wich is due if I pay
the remaining balloon payment does my friend loose
his interest in the property because of his inability to
pay?

Asked on April 7, 2019 under Real Estate Law, Michigan

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

No, he does not, unless the LLC's written operating agreement specifically states that if a member (owner) of the LLC does not contribure, he loses his interest in the company or property:
1) Generallky, one property owner (or owner of the company which itself owns the property) not paying taxes or costs does not deprive him of any ownership.
2) The property is not owned by you or your friend, based on what you write: it is owned by the LLC. Therefore, your friend not contributing does not affect ownership--it remains owned by the LLC. And your friend's ownership in or of the LLC is not affected by failing to contribute, unless there was something in writing specifically stating that he would lose rights or ownership if he did not contribute.


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