Property development joint ventures—acting for a contractor
Property development joint ventures—acting for a contractor

The following Property practice note provides comprehensive and up to date legal information covering:

  • Property development joint ventures—acting for a contractor
  • Structure
  • Making the intentions of the parties clear
  • Funding
  • Profit share
  • Decision making, deadlock and termination
  • JV with a public sector party

Structure

Reasons for the contractor to form a JV

There are a number of reasons why a contractor may wish to enter into a JV in relation to a development project such as:

  1. allowing several contractors to participate together to deliver large projects by pooling expertise and resources. For example, one party builds the residential element of the scheme, one provides land as a contribution to the JV, one has expertise in commercial development and one has infrastructure expertise. This may necessitate establishing a structure which sets out an agreed strategy and allows the contractors to have rights of control and influence depending on the relative sizes of their investments

  2. increase the likelihood of winning a tender where pooled expertise and a strong balance sheet provides a competitive advantage

  3. sharing risk with another party including other contractors and also to place specialist risk with the relevant JV party

  4. combine specialist knowledge and expertise to leverage resources on a larger scale and for greater returns

  5. gain access to particular market knowledge from a party with specialist market experience outside of the contractor's normal course of business

Types of JV structures

For further information on types of JV structures generally see Practice Notes: Property Joint Ventures—choosing the right structure, Joint ventures in property transactions—overview and Joint ventures and development.

Housing Grants, Construction and Regeneration Act 1996—developer and contractor JV

A JV agreement

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