Property development joint ventures—acting for an investor
Property development joint ventures—acting for an investor

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

  • Property development joint ventures—acting for an investor
  • Structure
  • Making the intentions of the parties clear
  • Funding
  • 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 an investor

Structure

Reasons for the investor to form a JV

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

  1. allowing several investors to participate together. For example, the development involved may be too large and expensive for an investor to invest in it alone. This may necessitate establishing a structure which sets out an agreed strategy and allows investors to have rights of control and influence depending on the relative sizes of their investments

  2. sharing risk with another party including other investors and also to place specialist risk with the relevant JV party including a developer

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

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

For the purposes of this Practice Note it is assumed that the investor is one of the parties to the JV and plays an instrumental part in its establishment rather than acting as a nominee shareholder. It is also envisaged that the developer is either a party to the JV or a development agreement will be entered into between the JV and the developer rather than an investor led JV contracting directly with a

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