Joint Venture Agreements and Development Agreements
Attwells Solicitors have significant experience in advising both landowners and developers on disposals and acquisitions of land for development.
Over recent years, it has become more commonplace for landowners and developers to take a more collaborative approach to the development of a site. In doing so, various methods of structuring the transactions have arisen. Generally, the structure of the transaction will be tailored to suit the nature of the project.
Where two or more parties (not necessarily always the landowner and developer) seek to collaborate on a project, it is essential that an agreement is put in place setting out the responsibilities and expectations of each party.
Where a landowner and developer collaborate, a common scenario is that the landowner will supply the land and allow the developer to obtain planning and build out the development. The developer will contribute the initial planning and build costs along with their relevant expertise. At the end of the build, the development will be sold and the profits split between the two parties.
In order to protect both parties, it is essential that an agreement is put in place setting out how the development is to be carried out. A development agreement is used to set out the obligations of each party and the timeframes they are to be carried out as well as the level of input each party will have during the process. For example, a developer will often want to minimise the input of the landowner whereas the landowner will usually want as much control as possible to ensure that the development is acceptable to them, especially if they will still own a neighbouring property at the end of the project. The agreement will also set out how the profits are to be divided and provisions for resolving any disagreements should they arise.
Joint Venture Agreements
Although a development agreement is a form of joint venture agreement, these can take many other forms depending on the nature of the project. Typically on SPV will be incorporated for the purposes of owning and/or carrying out the development which may be owned and controlled by either two or more separate companies or individuals who wish to pool resources and limit their personal liability for a particular project.
There are a number of factors which need to be considered when structuring a joint venture project. For example, the joint venture agreement will need to take into account of the following amongst other things:
- The scope and nature of the project;
- The objectives of each party;
- The degree of control and input each party is to have;
- How the project is to be funded;
- Who is to be responsible for day to day management of the project;
- What is the agreed duration of the project;
- If there is a disagreement under the terms of the joint venture agreement and a deadlock is reached (e.g. on the sale price of the completed development), how this is to be resolved;
- If a party wishes to leave the joint venture, how this is to be dealt with.
Attwells are able to offer expert advice on all the possible methods of structuring a land acquisition or disposal based on your requirements, whether this is via an Option Agreement, Unconditional/Conditional Contract, Promotion Agreement, Joint Venture or Development Agreement or an alternative structure.
If you are considering making a disposal or acquisition of land and would like to discuss your options, please contact Nick Attwell on 01473 229242 or 0207 722 9898 or email him at email@example.com for an initial no-obligation chat.