Real Estate Investor Obtains Significant Money Judgment Against Former Business Partner
When our real estate investor client verbally entered into a joint venture with the owner of two investment properties in Manayunk, Philadelphia, the parties agreed that the properties would be transferred into a limited liability company (LLC). The LLC would act as their joint venture entity and it was agreed upon that our real estate investor client would be granted an interest of twenty percent (20%) in the LLC upon his contribution of $250,000 towards the renovation of the properties. Considering their working relationship, our real estate investor client felt comfortable in proceeding to retain the services of contractors and providing financing for the renovation project, without title to the properties first being transferred to the LLC.
Following the renovation work, financed by our real estate investor client, the properties were leased to tenants. Acting as the property manager, our real estate investor client managed the relationship between the property owner and her tenants. After our real estate investor client incurred $110,000 on account of the renovation project, the relationship between him and the property owner began to break down. Upon realizing that their relationship could not be salvaged, our real investor client retained us to protect his property interest and investment.
Immediately, we initiated a lawsuit against the property owner to recoup our client’s investment and indexed a lis pendens encumbering title as to both properties so that any subsequent transfer or encumbrance clouding title to the properties would be held subject to his property interest. Unsurprisingly, the property owner vigorously defended the lawsuit, filing both a motion to strike the lis pendens encumbering title to the properties, as well as a motion to dismiss the complaint we filed on behalf of our real estate investor client.
The property owner’s early efforts to have the lawsuit dismissed and the lis pendens stricken were unsuccessful and, for over a year, the parties engaged in contentious litigation with the property owner repeatedly refusing to even discuss an amicable resolution. After a week-long bench trial, the trial court judge ruled in favor of our real estate investor client and awarded him a judgment of almost $100,000 against the property owner.
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