Commercial projects are often made possible by collaboration between two or more parties. In a property context, joint venture contracts can be an effective way of sharing risk and expertise and increasing the value of any development, transaction or project.
A joint venture should always be formalised in a comprehensive legal document. This agreement sets out the basis on which parties will work together to deliver a particular project or a number of projects. The joint venture relationship could relate to a one-off industrial construction, or a series of housing developments. It could be about purchasing a piece of land, or about ongoing investments or sleeping partners.
There are also plenty of options in relation to the structure of the joint venture. Many will be run through corporate vehicles such as limited companies or limited partnerships. This, as with all terms of the arrangement, are for negotiation and agreement between the parties. As part of this process, legal advice on the most advantageous options can mean the difference between a joint venture that works, and one that has problems.
The terms of any agreement usually cover:
- the joint venture’s purpose
- the parties’ respective contributions, including finances and assets
- how profits, losses and liabilities will be shared
- how any disputes will be resolved.
Each joint venture arrangement is different, so close attention has to be paid to:
- its viability
- a client’s exposure to risk
- limitation of their liability.
While clients are usually pleased to be sharing the burden of risk, some find the prospect, and the reality, of relinquishing control over the running of the project more difficult. The nature of joint venture arrangements demands that terms are well mapped out and thoroughly considered before they’re agreed.
Joint Venture Solicitors
Our commercial property lawyers work with businesses and individuals, advising them on the best form of arrangement to suit their property project. They get to the heart of each client’s objectives and help negotiate arrangements to match. Experienced in all types of commercial development and property-related projects, our team has the industry knowledge and practical as well as legal expertise to get joint venture arrangements up and running, and thriving.