Property Development Agreements
If you or your company is looking to set up a property development joint venture with other companies or individuals, Blackstone Solicitors can provide all of the expert legal assistance you need, advise on the legal due diligence process that is required and guide you as to the best form of company structure. There are a number of options available regarding the precise nature of the proposed structure, each with their own pros and cons. We have considerable experience in this area of law and can advise you throughout the process. We can also help with any relevant documentation to ensure you achieve everything you are hoping to through any agreement you make.
Speak to our joint venture solicitors today to find out more about how we can assist you and your business. Call us on 0345 901 0445 or allow us to call you back by completing our online enquiry form.
We place a huge emphasis on getting things done properly and efficiently. This is also true when providing legal advice concerning joint ventures; we have vast experience of drawing up joint venture agreements in the property development sector, doing so comprehensively and ensuring all of the necessary provisions for each party are properly set out, fulfilling every aim and objective whatever the preferred structure is. Within the principle of a joint venture agreement, there are, in fact, a number of different formats.
- Contractual Development Agreements
This is quite a common arrangement whereby two or more parties enter into a contract together in order to carry out a particular development.
This structure is quick as there isn’t a requirement to form a new company. Each party is normally only taxed on their share of the profits and isn’t liable for the debts of the other party unless there is a shared contract in place. This structure also allows the JV partners to retain ownership of their assets. The downside to this structure is that there is a risk in creating a partnership which gives rise to increased liabilities and raising finance without a legal entity can be problematic.
- Private Limited Company
In this instance, a special purpose vehicle (SPV) is created and the partners involved with the joint venture become the shareholders. Liability is usually limited to the amount each party has invested (share capital) and the company can specify the share rights each partner has based on their level of investment and involvement. Additionally, the company can own its own assets and when it comes to exiting, the shares can be sold to a new owner, as well as the asset being sold. The downside to this structure is the associated accounting requirements and the potential for double taxation
- Partnership or Limited Partnership
This is where the joint venture partners enter into a formal partnership arrangement which is declared to HMRC and is governed by UK law. This is a flexible system which allows a high level of confidentiality. The downside is that it can be difficult to raise finance as there is no legal entity and the exit of any of the partners will necessitate a new partnership agreement. There are also issues associated with limits of liability.
- Limited Liability Partnership (LLP)
An LLP creates a separate legal entity but is treated like a partnership from a tax perspective. As a result, all joint venture parties are taxed directly on their share of the profits. The LLP itself is not taxed on its profits. The LLP also creates limited liability of the joint venture partners, which can be a great benefit. The downside of this structure is the additional administrative and accounting burden and also the issues associated with limits of liability.
Regardless of the size of the development and the complexity of any proposed joint venture, our solicitors have the experience and specialist knowledge to help you achieve an outcome that is both fair and beneficial. We will take the time to make sure you fully understand the agreement and its objectives, as well as what is expected of each party to the joint venture.
Why Legal Help is Important
A joint venture in property development can be defined as an arrangement between two or more partners to co-operate together in order to achieve a common set of goals, outcomes or objectives. It is a structure that is commonly used within the property development industry and when used effectively, can provide significant value for all the parties involved.
Joint ventures can be complex and it is therefore essential that the terms are in your best interests and the joint venture agreement is drawn up in such a way that it meets your particular objectives.
At Blackstone, we can help to ensure the agreement is fair and gives you the very best chance of achieving the outcome you are looking for. Joint ventures can cover a wide range of collaborative business arrangements, each with their own specific requirements and intricacies. It is therefore imperative that you seek expert legal help to ensure any joint venture you are involved in, whether as a co-owner or an investor, is suitable and correct and that thorough legal due diligence is carried out prior to any agreement.
We provide various services for individuals and companies looking to set up a joint venture agreement for property developments including advising on agreements and making sure everything is completed thoroughly and without error and is in your best interests. There are distinct differences between the various structures available. Sometimes the differences are subtle and other times they’re clear and distinct. Choosing the appropriate structure for your business venture is important because it affects many aspects in the future such as legal protections and levels of taxation. It also helps to be considered with the decision making because it can be problematic to change structures later on.
Get in Touch
Find out more about our services and how our joint venture solicitors can help you and your business by getting in touch today. Simply call us on 0345 901 0445 or complete our online enquiry form and a member of the team will call you back at a convenient time.
We are able to help business throughout the North West – including Manchester and Chester – as well as the rest of the UK, from our offices in Cheshire and London.