Case scenario:
Nan, Fran, and Ann form a partnership, under a written agreement each signs, to buy, renovate, and resell old houses in an area near a major university. The neighborhood in which they plan to focus their activities is quite rundown, but they and others believe it will rapidly improve once a few properties in the area are renovated. The partnership agreement says that they plan to be in this venture "at least five years, or until they can recover their original investment plus a good profit." Each of the three partners puts up $50,000 in cash. One strategy of the partnership is to avoid bank financing and its associated fees, thus the partners plan to use the proceeds of sale on the first house to invest in a second, and so forth. They spend $90,000 to purchase their first property, on which they spend an additional $40,000 in renovation, and then sell for $160,000. They purchase the second property for $100,000 and have begun renovation that is expected to cost $35,000 when Ann suddenly attempts to withdraw from the partnership. Can Ann withdraw from the partnership? What other legal issues are present in this situation? It has been a year and a half since the partnership was formed.