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Ask Ely Your Own Question
Ely, Counselor at Law
Category: Real Estate Law
Satisfied Customers: 102506
Experience:  Qualified attorney in private practice including business, family, criminal, and real estate issues.
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I am a 25% owner in a commercial property. My brother owns

Customer Question

I am a 25% owner in a commercial property. My brother owns 75%. He entered into a contract to have the parking lot paved. there is now a dispute regarding payment of the contract. He signed the agreement. I did not. Why am I being sued and not him since I never signed the contract.
JA: Can you tell me what state this is in? And do you know who owns the lot?
Customer: California. We own the lot.
JA: Have you talked to a lawyer yet?
Customer: no
JA: Anything else you think the lawyer should know?
Customer: can i use lack of privity defense in this case if i go pro se
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Ely replied 1 year ago.

Hello and welcome to JustAnswer. Please note: This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. By continuing, you confirm that you understand and agree to these terms.

I am sorry to hear about this situation. Please tell me:

1) Was the lot owned though a corporation, or not?

2) Whose name(s) is/are on the deed to the property - yours and his? Or, both of your? Or just yours?

This is not an answer, but an information request. I need this information to answer your question. Please reply, so I can answer your question. Thank you in advance.

Customer: replied 1 year ago.
name on deed myself, my wife each 25% and my brother 50%. No corporation
Expert:  Ely replied 1 year ago.

Thank you.

Hmm. Do you and your wife have significantly more assets than your brother, overall?

Customer: replied 1 year ago.
Customer: replied 1 year ago.
no, I just want to know if lack of privity defense applies in my situation.
Expert:  Ely replied 1 year ago.

Thank you. That may be the reason.

Technically, the tenant may sue the owners of the property to get relief. By entering into the contract for the property, your brother had agency to bind you as well (arguably). Agency is when one party speaks for another:

EXPRESS AGENCY - the agent has actual authority from the principal. Example is the power of attorney.
IMPLIED AGENCY - the agent has implied authority from the principal. An example would be an director or officer of a company - while they are not expressly representing the company, it is implied they are, and anything they sign would be binding unto the company.
APPARENT AGENCY - that there was apparent authority. Example is if you walked into a store, and asked how much an item is. A person who worked there told you $40 and rang you up for $40. Later you find out that the item was actually $150, and the employee did not even have the right to ring you up. Regardless, they had apparent authority to you, and the price quoted by the employee with the apparent agency is binding upon the business.

Ergo, the lack of privity can be overridden by agency if they can prove that he HAD agency to speak for both of you.

But that still does not explain why only YOU are being sued. Perhaps because they think you have more assets for judgment. Someone in your situation can still make other nuanced arguments of course and may be able to win the suit - it really depends on the situation. But I am guessing that the above is why they are pursuing you, specifically.

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