The Dissolution of a Real Estate Partnership
Majority consent is required for decisions regarding joint real estate. As an example, a decision may express itself in the desire to rent the property or to add a building addition.
An owner of the land has a vested right to demand that the partnership be dissolved.
Court rulings and the Land Law validate this right. This means that, whether the property in question is land, an apartment, or a building, the right to dissolve the partnership in the real estate allows each partner to dissolve the partnership unilaterally and without the consent of his other partners in the property, provided certain conditions are met, such as good faith and non-abuse of the right.
By Igal Mor, Adv. & Notary
Accuracy in Legal Advice. Excellence in legal support.
How Does Sharing in Real Estate Work?
Shared land is a situation in which there are more than one owners of the land. In fact, the number of possible partners is unlimited. In such a partnership, contrary to initial intuition, all parts of the land are divided among all partners based on the portion they own.
This means that if partner A owns 70 percent of the land, this means that he or she owns 70 percent of each and every part of the land, as well as every grain (Moseh partners). Thus, the division of ownership in the property between the partners is not visible physically on the land, but it is present essentially in every aspect of it.
The Land Law, 5779-1969, Section 27
Real Estate Owned Jointly
Similarly to other types of partnerships, the sharing of real estate has many implications for the management and decision making regarding the property. In accordance with the Land Law, decisions regarding the property will be made by a majority vote of the partners. Therefore, without the consent of the majority of the land owners, no decision can be made regarding the parts of the land. As an example, if a partner in the real estate wishes to rent the property or conduct an eviction and construction procedure, he must solicit a majority of partners so that he may rent the property or proceed with construction.
It is important to note, however, that unlike managing and making decisions regarding the real estate, a partner may sell his share of the property unilaterally and without his partner’s consent.
Dissolution of a Real Estate Partnership
As with the sale of a partner’s interest in the real estate to a third party, when a partner in the partnership wishes to dissolve the partnership, the other partners are not required to agree or to raise a majority for the dissolution. That is, the right of a partner in real estate to demand the dissolution of the partnership gives him the possibility to bring about dissolution even completely unilaterally. This, based on the concept that the dissolution of the partnership is part of the partner’s ownership right in the land, so that it is not appropriate for that partner interested in dissolution to be at the mercy of the other partners when he wants to leave the partnership.
From the Real Estate Law, you can learn about the importance of the ownership rights of a partner in real estate, which states as follows: If the partnership agreement stipulates that the right to dissolve the partnership cannot be invoked for a period exceeding three years, the court may, notwithstanding the provision, order the dissolution of the partnership following such a period if it deems it just under the circumstances.
Even if there is an agreement between the partners that prevents or limits the dissolution of the partnership, the court will be able to override this agreement and order dissolution after three years. Or, in other words, a partner’s proprietary interest in the property prevails over his contractual right to prevent dissolution.
In general, when a petition to dissolve a partnership is submitted to the court, the property must be distributed in kind. In other words, the physical division of the property between the partners. It is important to note that this is different from the division in a partnership, in which the partnership exists in all parts of the property, no matter how small, and ownership is shared between the partners.
It is important to note that this is different from the division in a partnership, in which the partnership exists in all parts of the property, no matter how small, and ownership is shared between the partners. As an alternative, the partner’s share of the real estate may be sold to the other partners.
רע”א In court case No. 1017/97, Riedelwitz et al. ‘ נ י’ מודעי ואח’ח
“… Regardless of the law’s attitude towards the sharing of real estate, as long as it exists , the law seeks to facilitate as much as possible the dissolution of a partnership if a partner to the partnership wishes to do so: for the benefit of the partners and for the benefit of the development of the economy as a whole. … This is the case in partnerships to which the Partnerships Ordinanceapplies (see section 41(a)(3) and41(b) There is a Partnership Ordinance that governs partnerships in real estate, and this is how the law is. The absence of a prior agreement regarding a fixed-term partnership (as instructed) (b) of Article 37 According to the law, a partnership in real estate is the same as a partnership from the start–for the day (de die in diem), and to dissolve a partnership all that is required of a partner is that he informs his desire to allow the package.
There is no power of the law to make peace between yellow partners – or even between partners who have difficulty reaching an agreement–With this in mind–and without any tools in their arsenal to make peace between them, give the right –to dissolve the partnership at any time..
…”Here – they are Abram and Lot, son –His brother (Ben Haran), as well as their families and flocks and herds, who lived together as a family. Until the incident occurred. This is what the Bible tells us (Genesis 13:6-12) [A]):
“And the land did not carry them to sit together, because their possessions were great and not–They could sit together. As it turned out–Quarrel between Roy McKenna-Avram and Roy Makenna–It was Lot, the Canaanite, and the Persian who lived in the land. Then Abram said to Lot–Let there be a quarrel between me and you, and between Roy and your shepherds, because–We are brotherly people. However, all–The land before you, please separate from me, the mother of the left and Imna and if–To the right and I will go left. Lot lifted up his eyes– and saw the whole plainofthe Jordan, for it was all water before the Lord destroyed Sodom and Omrah as a gardenThe Lord, the land of Egypt towards Zoar And he choseSo Lot choseall the plain of the Jordan; and Lot journeyed east; and they separated themselves the one from the other. Abram dwelt in the land of Canaan,Canaan and Lot dwelt in the cities of the square and encamped as far as Sodom.
and Lot journeyed east; and they separated themselves the one from the other.: Using this method, you can dissolve a partnership that is not desired by one of the partners. In fact, just as pulling– Area in two, in brotherhood, increases troops, yes, pulling a rope for different areas is harmful and deserves to be stopped.
As long as the partnership is in existence, the democratic principle of majority rule will govern the management and use of the joint assets. Moreover Section 30(a) of the Land Law: “The owners of the majority of the shares in the common land may determine anything related to the normal management of the land and the normal use thereof.” This is true during the partnership’s life in the land; however, it is not true during its dissolution: in this case, democracy will not prevail, and the minority can and will be permitted to impose its opinion upon the majority.
So far – the overarching principle of allowing the relationship and dissolving the partnership in the land.
11. The second principle A real estate partnership (without an agreement between the partners) may be dissolved by distribution in kind (section 39(a) to the law. The property in question can, of course, be divided (see: In accordance with Section 38(a) of the law, if the land is divided in this way, each partner will be entitled to a share based upon his share in the partnership. The land resource is limited and unique, and the law recognizes the right of a person to continue to own even an unused part of the land. Therefore, a cogent order Section 39(a) ” Upon division, the partnership will be dissolved by way of division as required by law, according to which real estate will be divided As instructed, Section 39(b) of the law, onAccording to the need and interest, the court may determine “balancing payments” to compare the separate shares of the partners with their shares in the joint property before the division.
Third Principle If you want: an exception to the second principle – comes – In section 40(a) to the law, according to which the court will not order–on the division in kind of immovable property that cannot be divided (this is self-evident), and also does not order a house–The judgment may be made on distribution in kind if the partner knows that the distribution in kind will result in a considerable loss for all or a significant number of partners. In these circumstances, the partnership will be dissolved by selling the land for the highest price possible. As follows– We will further add to this law, and now we only asked to draw your attention –Legislators’ attention is drawn to the supremacy of the principle of division in kind. Even if a division in kind will result A loss to the partners, all or some of them, isnevertheless assessedonThe court ordered a division in kind Only if the loss will be a loss It is evident, Since the partnership will be dissolved when the land is sold and the proceeds are divided.
Fourth Principle is the uniform in section 42 In the law: Where the main part of the real estate is a house that deserves to be registered as a condominium, the court may–order dissolution of the partnership by way of registration in the register of condominiums and allocation of apartments in accordance with the shares held by the partners. No instructions are provided סעיף 42 Any statement regarding the relationship between the dissolution of co-ownership in real estate and the dissolution of co-ownership in a house.
And finally: Since the primacy is in the distribution of real estate in kind, the rule is that the applican no carry the burden of persuasion is on him. In the language of the judge H. Cohen in the case A.A 587/78..
As the rule, sharing in real estate is dissolved by division in kind; any other method of dissolution is considered an exception. Therefore, anyone who claims that real estate cannot be divided or who claims that a division in kind will result in a loss to one of the partners has the burden of proof on him.
As of now, there are three (or four) ruling principles on our matter, with one principle on their side.–Evidence legal aid. A Magistrate’s Court ruled,–as I recall, that the house could be divided in kind by making it a shared home. In contrast, The district court,–however, determined that turning the house into a shared house would result in significant losses for the partners, and he therefore ordered it relisted for sale at a higher price. We – on whose side did we stand? …
Support From a Lawyer is Essential
It should be noted that a partner’s right to dissolve the partnership is subject to certain restrictions, such as the agreement limiting the partnership, as mentioned, and even the principle of good faith and the prohibition of misuse of the right, as set forth in the ruling of the Supreme Court: “In the dissolution of a partnership, the overriding principle is that each partner in joint real estate can and is entitled to bring about, at his will, the dissolution of the partnership… indeed, this principle also carries exceptions, such as where a partnership agreement has been concluded that excludes or limits the right to demand the dissolution of the partnership… as long as The principle of supremacy is also subject to the doctrine of good faith and the principle of the prohibition of the misuse of the right…“.
In light of the above, it is evident that the dissolution of a real estate partnership is a procedure that may be complex and difficult, and that despite the law explicitly providing the right to dissolve, there are caveats to be considered. Therefore, if you are considering dissolving a partnership in real estate, we recommend consulting a lawyer and utilizing his services throughout the process.
Our firm focuses on real estate law and provides a broad range of services in the field of partnership dissolutions, as well as real estate subdivision, lease agreements, eviction-construction, condominium records, correction of warning notes, and tabu records.
