this agreement template is designed for situations where two parties will co-own a home and live in it together. it will work when the property is owned in equal shares or unequal shares, where the ownership percentage will change over time, or where one party will lend the other money. suitable for any u.s. state, plain english easy to understand and customize, seven pages long with a detailed table of contents for easy reference. a memorandum of agreement protects an owner who is not bankrupt or in debt from creditors, bankruptcies and liens involving other owners, and from attacks by heirs, ex spouses, and other non-signers. it provides “constructive notice” of the existence of the agreement so that creditors and other outside parties cannot claim they are not bound, and prevents them from using a “partition” to force sale and division of proceeds according to title percentage (without regard to what the agreement says).

and even if you could guarantee a reaction today, things change. a partnership agreement might not be able to predict every eventuality but it can put fundamental principles and dispute resolution steps in place. it’s one thing to shake your partner’s hand on an agreement to put in an equal amount of money to buy a rental property. a partnership agreement can include initial contributions, outline estimated contributions over the course of your ownership, place limits on future contributions, create a contribution fund from rental profits and require an emergency fund. not every partnership is based on equal allocation of contributions and profits. if you think the big decision in a rental property partnership is limited to the purchase, think again.

the formal definition of a general partnership is the association of two or more persons carrying on as co-owners of a business for profit, whether or not these persons intended to form a limited or general partnership. for starters, you need to do due diligence on the financial aspects, your other partners, the title paperwork, the building itself, mitigate hazardous materials, and be aware of other environmental issues before forming a general partnership, limited partnership, or limited liability company. a partnership agreement should define the legal and financial consequences for violating the spirit and the letter of the agreement. the formal definition of a general partnership is the association of two or more persons carrying on as co-owners of a business for profit, whether or not these persons intended to form a limited or general partnership.

the big question you might have, before adding this facet to your real estate development business, is what does a real estate business partnership agreement look like? what are the key benefits to this type of agreement? the key benefit of a real estate partnership agreement is that it clearly lays out the rights and responsibilities of each member of the partnership. — all parties can be guided by the agreement to the best course of action. one of the first — and most important — elements of a real estate business partnership agreement is to establish the specific roles and responsibilities of each member of the partnership. (finding an area not covered by one of the partners, in an initial draft of a partnership agreement, is a great way to find “blindspots” in your venture.)

in this article, we’ll take an in-depth look at forming a real estate partnership and buying property with other partners. however, it’s more common for a real estate partnership to have a general partner who assumes more responsibility and liability, usually in exchange for a bigger share of the profits, with the other members being limited or passive partners. partnership agreements can be customized in a nearly unlimited number of ways to meet the unique needs of a specific real estate investment. a real estate partnership can be formed for a unique reason, such as gaining access to a partner’s contact at the local planning and zoning department, or for more general reasons such as putting bigger – and potentially more profitable – deals together.