Sample Joint Venture Agreement between Landowner and Developer
In real estate development, joint ventures between landowners and developers can be an effective way to bring a project to life. Typically, a joint venture agreement outlines the roles and responsibilities of each party involved, as well as the resources being contributed by each party. This article will provide a sample joint venture agreement between a landowner and a developer, with a focus on important elements to consider when drafting such an agreement.
Introduction
The purpose of this joint venture agreement is to establish a partnership between the landowner and the developer for the development of a commercial property. The agreement sets forth the obligations and responsibilities of each party, as well as the sharing of profits and losses.
Partnership Structure
The joint venture partnership will be structured as a limited liability company (LLC). The developer will serve as the manager of the LLC, responsible for overseeing the project’s day-to-day operations. The landowner will provide the land for development and contribute capital to the LLC.
Capital Contributions
The landowner will contribute the land as equity to the LLC, while the developer will contribute the necessary funds to cover development costs. The capital contribution amounts will be specified in the joint venture agreement.
Management and Control
The developer will have full management control of the project, while the landowner will have the right to monitor the development progress. Major decisions, such as changes to the project or financing, must be approved by both parties.
Distribution of Profits and Losses
Profits and losses will be shared based on the parties` capital contributions. The landowner will receive a percentage of the profits based on the value of the contributed land, while the developer will receive a percentage based on their capital contribution.
Term and Termination
The joint venture agreement will have a specified term, with the option for both parties to renew or terminate the agreement upon expiration. If one party breaches any of the terms and provisions of the agreement, the other party has the option to terminate the agreement.
Conclusion
In conclusion, drafting a joint venture agreement between a landowner and a developer is a vital step in ensuring a successful partnership in a real estate development project. The agreement should outline the structure, responsibilities, and obligations of each party, as well as the capital contributions, management and control, and profit distribution. It is important to seek legal advice and have a thorough understanding of the terms and provisions before entering into a joint venture agreement.
