Managemenet Duties in a TIC Agreement

mddumddu

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California
We own a 1/3 share of a condo in California with 2 other partners. Partner #2 bought a 2nd share with his daughter, so they now own 2/3. We operate under a Tenancy-in-Common agreement (since 2014). As part of the TIC, we make quarterly contributions to cover our share of expenses and to fund a "Reserve" account to handle unexpected expenses and capital improvements. Spending from the Reserve account requires unanimous agreement, but in October 2014, all partners (including our current partner) agreed to spend $500 per year from the Reserve on small improvements, with the remainder saved for large capital expenditures or emergencies. In addition to the Reserve account, we have a $500 per year budget to cover repairs & maintenance.

Per the TIC, we are the "Unit Manager" responsible for maintaining the unit (furnishings, fixtures, etc.). The agreement clearly states we are responsible for the look & feel (color, fabric, etc.) of all things in the condo (major capital improvements require unanimous agreement). The other partner is the "Financial Manager" responsible for the bank account and paying the bills. Since January when the other partner purchased their additional interest, they have been trying to minimize our role and they refuse to reimburse us for purchases made to replace broken furniture, and for small improvement items spent pursuant to our 2014 Reserve account spending agreement. The other partner now requires we only purchase exactly what they specify and insists on unanimous agreement for any item purchased. They've also suggested each partner should be able to buy whatever items they want up to an agreed-upon dollar limit.

There is no provision in our TIC specifically addressing a situation where the Financial Manager does not reimburse another partner for costs incurred. Our TIC does require arbitration to resolve disputes. Should we:

1. Deduct amounts we spent to replace broken items and small upgrade purchases from our quarterly expense contribution since the Financial Manager refuses to reimburse us? At that point we would wait for them to file for Arbitration. Or,

2. Advise the Financial Manager he is in default on our agreement and file for arbitration?

My concern with deducting amounts spent from the quarterly contribution is that the Financial Manager could claim we are in violation of the TIC by not making our full quarterly contribution payment. There are payment default provisions in the TIC which allow the Financial Manager to foreclose on the defaulting owner's share (after some time & notification requirements).

Attached is our TIC Agreement. Exhibit D lists the Unit Manager duties.
 

Attachments

  • Tahoe TIC Agreement.pdf
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We own a 1/3 share of a condo in California with 2 other partners. Partner #2 bought a 2nd share with his daughter, so they now own 2/3. We operate under a Tenancy-in-Common agreement (since 2014). As part of the TIC, we make quarterly contributions to cover our share of expenses and to fund a "Reserve" account to handle unexpected expenses and capital improvements. Spending from the Reserve account requires unanimous agreement, but in October 2014, all partners (including our current partner) agreed to spend $500 per year from the Reserve on small improvements, with the remainder saved for large capital expenditures or emergencies. In addition to the Reserve account, we have a $500 per year budget to cover repairs & maintenance.

Per the TIC, we are the "Unit Manager" responsible for maintaining the unit (furnishings, fixtures, etc.). The agreement clearly states we are responsible for the look & feel (color, fabric, etc.) of all things in the condo (major capital improvements require unanimous agreement). The other partner is the "Financial Manager" responsible for the bank account and paying the bills. Since January when the other partner purchased their additional interest, they have been trying to minimize our role and they refuse to reimburse us for purchases made to replace broken furniture, and for small improvement items spent pursuant to our 2014 Reserve account spending agreement. The other partner now requires we only purchase exactly what they specify and insists on unanimous agreement for any item purchased. They've also suggested each partner should be able to buy whatever items they want up to an agreed-upon dollar limit.

There is no provision in our TIC specifically addressing a situation where the Financial Manager does not reimburse another partner for costs incurred. Our TIC does require arbitration to resolve disputes. Should we:

1. Deduct amounts we spent to replace broken items and small upgrade purchases from our quarterly expense contribution since the Financial Manager refuses to reimburse us? At that point we would wait for them to file for Arbitration. Or,

2. Advise the Financial Manager he is in default on our agreement and file for arbitration?

My concern with deducting amounts spent from the quarterly contribution is that the Financial Manager could claim we are in violation of the TIC by not making our full quarterly contribution payment. There are payment default provisions in the TIC which allow the Financial Manager to foreclose on the defaulting owner's share (after some time & notification requirements).

Attached is our TIC Agreement. Exhibit D lists the Unit Manager duties.


You're not going to proper and accurate legal advice for free.

If you want your concerns treated professionally, you need to hire a real, licensed attorney in your county or your state.
 
You're not going to proper and accurate legal advice for free.

If you want your concerns treated professionally, you need to hire a real, licensed attorney in your county or your state.
Hmm - what's that saying, if it sounds too good to be true it probably is. Thanks.
 
Hmm - what's that saying, if it sounds too good to be true it probably is. Thanks.

No, it means there are no magic incantations, trance dances, or spell casting that one person can use on another person to make the other person comply with your entreaties, needs, or demands.

It means that REAL LEGAL ADVICE can only be acquired from an attorney you hire, or one that takes your case pro bono.

It means that no one on this site is allowed to provide legal advice, even if that person chooses to read your documents.

Licensed attorneys are prohibited from offering legal advice via the internet.

Licensed attorneys, myself included, are allowed to discuss legal issues, and answer questions, but that isn't legal advice.

Again, if you are having issues with the people you call partners and are unable to negotiate those issues, you'll have to hire an attorney to assist you in that endeavor.

Why?

It is all revealed here at the bottom of this website's various pages:

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So may I rephrase the question? Is there anything in the Exhibit D under Unit Manager that requires me, as the Unit Manager, to only purchase the exact item(s) that my partners specify when I solicit their feedback for a priority list of Reserve Account spending?

Another question related to the Reserve Account mentioned in my original post. If 3 partners to a TIC Agreement make a subsequent verbal agreement (documented by email & by the process followed for 3 years) to spend $500 per year from a Reserve Account for small improvements, is a new owner who purchases one of the original partner's share obligated to honor the prior agreement to spend $500 from the Reserve Account?
 
So may I rephrase the question? Is there anything in the Exhibit D under Unit Manager that requires me, as the Unit Manager, to only purchase the exact item(s) that my partners specify when I solicit their feedback for a priority list of Reserve Account spending?


I didn't read any of your documents.

I choose not to read things people post, as I always practice safe computing.

I don't know if you're a hacker or a scammer or a Russian bot, so I only download stuff from known, trusted associates.

You can do that which you resist, seek REAL legal advice from an attorney you hire.
 
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