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

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

  • Property development joint ventures—acting for a landowner
  • Structure
  • Making the intentions of the parties clear
  • Land price and security
  • Control in the pre-development phase
  • Developer flexibility
  • Profit share
  • Decision making, deadlock and termination
  • JV with a public sector party

Property development joint ventures—acting for a landowner

Structure

Reasons for the landowner to form a JV

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

  1. sharing risk with another party and to place specialist risk with the relevant JV party and in particular placing such risk with a developer

  1. the landowner wanting a greater return for the land disposal over and above a simple land receipt with overage structure — the landowner may not have the knowledge and resources to develop the land itself, but can share in the upside to a greater degree in a JV relationship because while the risks may be greater, the profits could be higher in light of the risks taken

From a landowner's perspective, it should be mindful not to over complicate the JV structure and so expose itself to greater risk and liability — particularly if it does not have the skill set and/or resources to manage a developer and/or investors in a JV. For example, a more traditional contractual relationship, such as a development agreement or a sale of land conditional upon the grant of a satisfactory planning permission, may be more appropriate than a corporate JV structure where the objective of sharing in profits can be achieved through overage arrangements. Where there are no

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