Guide to Selling Self-Storage When Partners Are in Dispute in Texas

Business partnerships can go sideways in ways you never expected when you first shook hands on the deal. The self-storage facility you co-own has become a reminder that you and your partner no longer work well together, and something has to give. Now you’re wondering how to get out without making things worse.

Selling a self-storage facility when you’re in the middle of a partnership dispute isn’t the easiest thing you’ll ever do, but it’s still possible. Even when your partner isn’t cooperating, Texas law gives you options to move forward.

If your self-storage partnership has fallen apart, we offer a straightforward solution. Commercial Property Offer buys self-storage facilities in any condition—even during partner disputes. Our team helps you move on quickly, discreetly, and without added conflict, so you can exit cleanly and get the resolution you need.

Why Self Storage Partnerships Fall Apart

Most self-storage partnerships don’t start with red flags waving everywhere. You both saw potential, that’s why you put your money and time on the line. However, somewhere along the way, the cracks began to appear.

Money Disagreements Between Partners

The money fights usually start small and then snowball into something that feels impossible to fix. For example, one of you is ready to finally take some profit home after years of building the business. Still, the other person thinks every dollar should be reinvested in improvements and expansion.

It can also be that one partner is treating expenses casually while the other is scrutinizing every invoice like the budget police. Trust starts eroding when one person feels like they’re being financially responsible and the other is being reckless.

You agreed on a 50/50 profit split at the beginning, but now it feels wildly unfair when you consider who’s actually contributing what to the business. These disagreements don’t just affect your bank account. They poison every other aspect of the partnership because money touches everything you do.

Different Visions for the Business

You might want to position your facility as the premium option in the area with better security, climate control, and customer service that justifies higher rates. Your partner wants to compete on price, keep overhead low, and fill every unit as fast as possible.

Both strategies can be effective in the self-storage business, but they cannot be executed simultaneously. Every decision becomes a fight because you’re fundamentally working toward different goals.

Should you invest in upgraded security cameras or keep the basic system and save the money? Is it worth paying for professional management, or should you keep doing it yourselves? Do you spend money on marketing, or do you rely solely on location?

When you can’t agree on the basic direction of the business, you’re no longer true partners. You’re just two people stuck owning the same property.

Unequal Workload Distribution

This one breeds resentment faster than almost anything else. One partner is fielding tenant calls at all hours, showing up to deal with lockouts on weekends, handling maintenance issues, and basically running the day-to-day operations.

The other partner’s main contribution is checking the bank balance once a month and possibly attending quarterly meetings. The person doing all the grunt work starts feeling taken advantage of, even if the other partner put up most of the initial capital.

You tell yourself it’ll balance out eventually or that everyone’s contributing in their own way, but deep down, you know it’s not a fair split. The operational partner starts mentally calculating their hourly rate and realizes they’d make more working for someone else. Meanwhile, the passive partner doesn’t understand why their financial investment isn’t valued more.

Lack of Clear Communication

Sometimes partners just stop talking to each other about anything that matters. Important decisions get made unilaterally because asking means risking another argument.

Bills don’t get paid on time because you each thought the other person was handling it. Maintenance issues at the property go unaddressed for weeks because bringing them up requires an actual conversation, and those have become exhausting.

You find yourself sending terse emails instead of making a phone call. When you do talk, the subtext is louder than what’s actually being said.

This communication breakdown creates a vicious cycle in which minor problems escalate into major issues because they are not addressed promptly. Then, you’re both defensive and frustrated when things finally come to a head.

Disputes Over Reinvestment vs. Profit Distribution

The facility is finally generating a decent income, and you have different ideas about what should happen with it.

You want to take distributions because you’ve been patient for years and have other financial obligations or opportunities that require your attention. Your partner wants every cent reinvested in the property. They want to buy the lot next door for expansion, or add another building, or upgrade to premium units. Neither position is inherently wrong, but you cannot have both.

This dispute usually reveals that you’ve had different long-term goals all along. One of you sees this as a cash-flowing asset that should provide income now, while the other sees it as a wealth-building project that won’t pay off for years. When you can’t align on something this fundamental, the partnership has probably run its course.

What Are Your Rights as a Self-Storage Owner Under the Texas Property Code?

In Texas, there are actual enforceable rights as a co-owner if you own a self-storage property. Your partner can’t just freeze you out or refuse to cooperate indefinitely. There are legal mechanisms in place to protect your interests. What matters is how your partnership was structured. That is, whether you formed an LLC with an operating agreement, set up a limited partnership, or just went in together as general partners.

As a partner, you’re entitled to access the business’s financial records and books. You also get to participate in significant decisions about the property unless your partnership agreement says explicitly otherwise. Selling the facility definitely qualifies as a substantial undertaking.

If your partner is mismanaging money or making deals behind your back that hurt the partnership, Texas law says they’re violating their fiduciary duty to you. The Texas Property Code also gives you the right to partition. This is a legal method for compelling the sale of jointly owned property when co-owners can’t agree on its disposition.

Can You Sell a Self Storage Facility During a Partnership Dispute in Texas?

Yes, you can sell a self-storage facility during a partnership dispute, but the path you take depends on how cooperative your partner decides to be. If both of you agree that selling is the best option, you just need to work through the logistics and money stuff. However, when one partner wants to sell, and the other is digging in their heels, it can become more complicated.

The cleanest scenario is when you both recognize the partnership isn’t working and agree to sell. You split the proceeds and move on with your lives. The complications arise when your partner either refuses to sell, wants to buy you out but won’t offer a fair price, or can’t agree on the property’s worth. 

If your partnership dispute is hindering your ability to move forward, we can help. Contact us for a straightforward offer—we buy self-storage facilities in any condition and provide a fast, fair solution so you can exit the situation with clarity and confidence.

How to Sell Self Storage with Partnership Dispute in Texas: 7 Steps

Selling a self-storage facility during a partnership dispute is a lot more complicated than a regular sale, but it’s doable. These seven steps will walk you through the process from start to finish, whether your partner is cooperating or fighting you every step of the way.

Step 1: Review Your Partnership Agreement

The first step is to locate the paperwork you signed when forming the partnership and review it carefully. Your partnership agreement or operating agreement serves as the rulebook for handling disputes and determining what happens when someone wants to exit.

Find Buy-Sell Clauses in Your Operating Agreement

Buy-sell clauses tell you precisely what’s supposed to happen when one partner wants to exit. Some agreements include a shotgun clause, where one partner names a price, and the other must either buy or sell at that price. Others have a right of first refusal that gives your partner the first chance to buy you out before you can sell to an outside buyer.

What to Do If You Don’t Have a Written Agreement

Many partnerships never formalized their arrangements on paper. For example, you may have had a handshake deal or started operating together without ever defining the terms. Not having a written agreement doesn’t mean you’re completely at a loss. However, it does mean you’re operating under Texas default partnership laws instead of the terms you specifically chose.

Step 2: Attempt Negotiation and Mediation

Before you lawyer up and file anything in court, you really should try to work this out directly with your partner. Sit down with your partner (ideally with a neutral third party in the room) and lay out what you want and why.

If direct conversation isn’t working, consider hiring a professional mediator who specializes in business disputes, as mediation is a less formal and significantly less expensive alternative to litigation.

Step 3: Get a Professional Valuation

You can’t negotiate a fair buyout or sale if you don’t know the property’s actual value. You should get a professional appraisal from someone who understands that self-storage facilities are non-negotiable at this point.

A qualified appraiser will look at your occupancy rates, rental income, operating expenses, location, and what comparable properties have sold for recently.

Step 4: Explore Legal Options for Forced Sale

When negotiation fails, and your partner won’t budge, Texas law gives you ways to force a resolution. These legal options aren’t enjoyable, and they come at a cost, but sometimes they’re the only way to break a deadlock.

Partition Actions in Texas

A partition action is your legal right to force the sale of jointly owned property when co-owners can’t agree. With self-storage facilities, physical division usually doesn’t make sense. Courts typically order a sale of the property, and the proceeds are divided between the partners after paying off any debts and legal fees.

Court-Ordered Sales

When the court orders a sale through partition, they’ll appoint a commissioner to handle the sale process, who acts as a neutral party to market the property and find buyers.

Court-ordered sales eat into your proceeds because you’re paying court costs, the commissioner’s fees, and lawyer fees on top of regular closing costs.

Buyout Options

Sometimes, the court or a mediator will encourage one partner to buy out the other, rather than forcing a sale to a third party. The buying partner usually needs to secure financing, but buyouts are cleaner than selling to outsiders because you avoid real estate commissions.

Step 5: Prepare Your Self-Storage Facility for Sale

Whether you’re selling to a third party or one partner is buying out the other, you need to get your facility in order. Buyers want to see clean financials and a property that has been well-maintained, not a mess that reveals the chaos of a partnership dispute.

Financial Documentation You’ll Need

Whether you’re selling to a third party or one partner is buying out the other, you need to get your facility in order. A company that buys self-storage in Texas still expects clean financials and a well-maintained property—not a mess that exposes the chaos of a partnership dispute.

Address Property Maintenance Issues

Walk the property with fresh eyes and address the apparent issues that make it appear neglected. Features like burnt-out lights, malfunctioning gate systems, overflowing dumpsters, and peeling paint all convey a message that the property hasn’t been adequately maintained.

Focus on safety and security issues first, then address the basics of curb appeal, such as landscaping and cleaning common areas.

Step 6: Market Your Self-Storage Facility Strategically

Once the property is ready, you need to find buyers who understand what they’re getting into. You need to be transparent when marketing a self-storage facility during a partnership dispute; otherwise, you’ll scare off serious buyers.

Disclose Partnership Disputes to Buyers

You must be upfront about the partnership situation, as buyers will likely discover it during due diligence anyway. You need to frame it professionally. You’re not airing dirty laundry; you’re explaining that the partners have decided to go their separate ways and are committed to a clean sale.

Find Buyers Who Understand Complex Situations

Not every buyer wants to deal with a partnership dispute sale, but experienced commercial real estate investors and self-storage operators frequently encounter these situations. Work with a commercial real estate broker who specializes in self-storage facilities and has connections with serious investors in your market.

Step 7: Close the Sale

You’re almost there, but closing a self-storage sale during a partnership dispute requires careful attention to how the money is divided and who handles what responsibilities until the final transfer.

Split Proceeds Between Disputing Partners

The closing statement must clearly indicate how the sale proceeds are divided between partners. You must account for paying off any mortgages or liens, covering closing costs, real estate commissions, property taxes, and any other debts the partnership owes. What’s left after all that gets split according to your ownership percentages.

Settlement Statements and Equity Distribution

The settlement statement breaks down every dollar that comes in and goes out of the transaction. You need to review it carefully with your lawyer before signing. Ensure that debts are paid in the correct order. Secured debts like mortgages first, then liens, then unsecured debts, and finally distributions to partners.

Handle Prorated Rent and Security Deposits

Tenants who’ve prepaid rent for periods after the closing date represent money that belongs to the buyer, not you. You’ll need a current rent roll showing which tenants have paid through what dates, who’s behind on rent, and what security deposits are being held.

How to Handle Tenant Accounts During a Dispute

Tenant accounts can exacerbate the situation when you’re dealing with a partnership dispute.

One partner might have been collecting rent while the other has no idea which tenants are current and which ones are three months behind. Some tenants have been paying one partner directly while the other partner thinks they’re delinquent. This lack of coordination can be problematic when trying to sell, as buyers require accurate financial records.

You should create a complete and honest rent roll right now, today, before things get any worse. List every single tenant, what they’re paying, when they last paid, and whether they’re current or behind.

If you and your partner have been operating separate bank accounts or collecting payments individually, you need to reconcile all of that into one master document. Buyers will demand this information during due diligence, and any gaps in your records will either kill the deal or give buyers ammunition to negotiate a significantly lower price.

You also need to figure out how to handle ongoing rent collection during the sale process. Set up a system where all rent payments are centralized, and both partners can view the incoming funds.

If trust is completely broken between you and your partner, you may want to consider having payments go to a neutral third party, like your lawyer or accountant. They can track everything and distribute funds according to your ownership split.

How to Protect Your Financial Interests Through the Sale

You’re already stressed about the partnership falling apart, and the last thing you need is to get screwed financially on your way out the door. Here’s how to protect your interests during a sale.

Document Everything from Day One

Keep records of every single conversation, email, text message, and financial transaction related to the sale. If your partner agrees to something verbally, follow up with an email confirming the discussion so you have it in writing.

Save copies of all financial statements, expenses you’ve paid, improvements you’ve made, and any money you’ve put into the business during the dispute.

Keep a paper trail of your communications with buyers, brokers, appraisers, and lawyers as well. If your partner later claims you sabotaged a sale or didn’t cooperate with the process, you’ll want proof that you were acting in good faith the whole time.

This isn’t being paranoid. It’s about protecting yourself in a situation where trust has already broken down, and people’s memories of conversations tend to get selective when money is on the line.

Keep Separate Records of Contributions

You need to be able to prove exactly what you put into the partnership, especially if your original agreement was vague or nonexistent. Pull together bank statements showing your initial capital contribution and receipts for any additional money you’ve invested. You should also keep records of any improvements or repairs you have paid for, as well as documentation of any personal guarantees you have signed for loans.

If you’ve been doing most of the operational work while your partner has been collecting checks, keep a log of the hours you’ve spent managing the facility.

This documentation serves as your leverage when negotiating the division of proceeds. Your partner might remember things very differently from you when it comes to who contributed what. Without records, you’re just arguing about feelings and perceptions.

Complex numbers and receipts settle those arguments. They give you a much stronger position, whether you’re negotiating a settlement or presenting your case to a mediator or judge.

Know Your Equity Position

Before agreeing to any sale terms or buyout offer, you need to understand precisely what your equity stake is worth—especially if you decide to sell your self-storage facility for cash in Texas. Take the appraised value of the property and subtract all outstanding debts and liens. What remains is the equity that is split between partners.

Your share of that equity depends on your ownership percentage. It may also be affected by additional capital contributions you have made over time or by terms in your partnership agreement regarding profit distribution.

Don’t just trust your partner’s calculations about what you’re owed. Run the numbers yourself or have your accountant do it. This is where people try to pull fast ones by inflating expenses, hiding income, or conveniently forgetting about money you contributed.

If the numbers your partner is throwing around don’t match what you calculated, you should demand to see the backup documentation. Please don’t agree to anything until it makes sense.

How to Handle a Partnership Dispute When Selling Self Storage in Texas

When you’re in the thick of a partnership dispute and trying to sell at the same time, you need people in your corner who actually know what they’re doing. This isn’t the time to wing it or try to save money by handling everything yourself. You need professionals who’ve seen this mess before and know how to get you through it.

Work with Attorneys Experienced in Texas Partnership Law

Find a lawyer who specializes in partnership disputes and commercial real estate in Texas. You want someone who has handled multiple partnership breakups involving property sales and is familiar with the intricacies of the Texas Business Organizations Code and Property Code.

Ask potential attorneys how many partnership dispute cases they’ve handled and what outcomes they achieved. You should also inquire about the typical duration of the process. Of course, ensure they understand the self-storage business specifically, as it has its own unique quirks that residential real estate lawyers may not be familiar with.

Hire Commercial Real Estate Brokers

You need a broker who specializes in self-storage facilities. Regular residential agents or general commercial brokers often lack a thorough understanding of the self-storage market, which can result in incorrect pricing and difficulties in finding the right buyers.

Self-storage brokers are familiar with the typical cap rates in your area. They also understand how to value properties based on occupancy and income potential. They have networks of investors who regularly purchase self-storage facilities.

A good broker will also know how to market a property that’s being sold during a partnership dispute without making it look like a desperate fire sale.

Consider Professional Mediators

A professional mediator who specializes in business disputes can be helpful when you and your partner have stopped being able to talk productively. They’re trained to get past the emotional stuff and focus on the practical business aspects of untangling your partnership. They cost way less than taking your partner to court.

Even if you don’t reach a complete agreement in mediation, you’ll often narrow down the issues enough that whatever legal action you need to take afterward becomes much simpler and cheaper.

Maintain Professional Communication Throughout the Process

This is probably the most challenging part when dealing with a partner you can barely stand, but you must maintain professional and business-focused communication throughout the sale process.

Avoid sending angry, late-night emails and refrain from badmouthing your partner to potential buyers or brokers. Don’t let your emotions sabotage the deal just because you want to get even with your partner.

Every unprofessional move you make can cost you money and drag out the process. Buyers will walk away if they see you and your partner acting like children.

Key Takeaways: How to Sell Self Storage with Partnership Dispute in Texas

Selling a self-storage facility during a partnership dispute in Texas is challenging, but it’s not impossible when you understand your rights and follow the proper process.

Review your partnership agreement first to determine what buy-sell provisions are in place. If you don’t have one, be aware that Texas law still provides options, including the right to force a sale through partition. Always try negotiation and mediation before going to court.

If you’re ready to move forward from your partnership dispute and want to sell without months of complications, contact us at Commercial Property Offer! We purchase self-storage facilities in Texas for cash, and we understand the complexities of partnership disputes. We can close quickly, so you can split the proceeds and get on with your life. Call us at (855) 806-3337 to discuss your situation and get a fair cash offer for your property.