Limited Partnership General Real Estate Sample Agreement

Auguest 13, 2004
By Richard Smith, LLB

Anyone interested in investing in a limited partnership investing in general estate needs to consider carefully the issues they should include in their partnership agreement. In order to assist you here, the following are some provisions that should be included in every limited partnership general real estate sample agreement.

Probably the most important provision in all limited partnership general real estate sample agreements is going to relate to the powers that the general managers have to operate the partnership.

Here, unlike a specific real estate partnership, the partnership has been established in order to invest in real estate in general. Thus, deciding on whether or not such investments should be done by unanimous or majority vote, or even by the managing partner alone, is an issue that needs to be considered very carefully. Here, it should be noted that without a provision clearly setting this requirement out in a partnership agreement, each partner can act to bind the partnership by themselves.

Along with this, due to volatile nature of investing in real estate, how the partnership profits and/or losses are going to be distribute is essential.

Limited Partnership General Real Estate Sample Agreement - House-Keeping
Aside from the essential general management issues set-out above, your partnership agreement will also need to include how to deal with certain general house-keeping issues. For example, the partnership agreement will need to set out how often the partnership should meet to discuss matters affecting the partnership.

Depending on the number of partners in the real estate partnership, you may find meeting once a month is ideal. Alternatively, you may only want to meet to meet once a quarter. No matter what you decide, you need to make sure your partnership agreement provides for what happens in any emergency situation that may arise in an interim period; for example, whether the general manager can make a unilateral decision in such a case.

Finally, your partnership agreement needs to provide for a wind-up, buy-out, situation should the general real estate partnership fail to deliver on its intended aims.