In the case of a landowner and developer joint venture agreement, the first section will outline the obligations of the developer. This section outlines the obligations of the first party and is usually split into a number of clauses.
This means there is no such thing as an ‘off the shelf’ joint venture agreement.Ī general joint venture agreement template is as follows: Obligations – Party 1 (usually the Developer) Joint Venture Agreement TemplateĮach JV agreement is a customised document that reflects the agreement of the parties and no two documents are the same. The developer can be paid a fixed amount, a percentage of the sale proceeds or a combination of both with a development management fee paid while carrying out the development and then sharing in a portion of the sale proceeds.Īlthough these are the most common situations, you should always have a joint venture agreement in place if you’re carrying out a property development with two or more parties. Investor and Developer – the investor pays to purchase the land and funds the development costs and the developer carries out the development.The parties will then share in the proceeds of the developed lots once sold, often in proportion to the development costs they paid along the way. Two Developers – the two parties acquire the property and carry out the development together, usually sharing costs and splitting the development obligations.It is common for the developer to pay the development costs and for the parties to share in the proceeds once the developed lots are sold. Landowner and Developer – one person contributes the land and the other person carries out the development.The most common situations for a JV agreement in property development are: When is a Joint Venture Agreement or Development Agreement used? While you might have agreed on who pays the major development costs and who carries out most of the work but did you agree on who gets to name the development? How about what happens when you can’t agree on something? What if someone dies or becomes insolvent? Who will be providing personal guarantees if required? A joint venture agreement documents all of these things from the start to avoid arguments in the future. If you’re doing a property development project with someone else, you should have a development agreement or joint venture agreement from day one to ensure the obligations of the parties are clear. The purpose of the the JV agreement is not only to document the obligations of the parties, but also to document what happens when something goes wrong.Ī lot of people think joint venture agreements and development agreements are only for major property developments and not for smaller projects…and they’re wrong. A joint venture agreement, also known as a JV agreement or development agreement, is one of the most important documents when carrying out a property development with one or more partners.
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