Development Agreements (cont'd...2)

Joint Venture Agreement

There are a number of ways in which to structure a joint venture agreement.  The most common way is that the developer will find an institution or individual who wishes to invest money into the project.  The investor and the developer will join together and form a limited company (known as a Special Purpose Vehicle or 'SPV').

In return for shares in the SPV the Developer will usually transfer the land to the company and the investor will inject money into the venture.  The money injected will then be used to fund the development costs.  In the event that the development costs outstrip the money that has been injected then each party will either have to inject more of their own money or will have to approach a bank or financial institution for finance. 

Depending on how the Joint Venture is structured the documentation can become extremely complex and raise issues of Corporate Law and Tax Law as well as issues of Land Law.

Conclusions - Why Armitage Sykes?

Development Agreements are highly complex contracts.  Each type of Agreement carries its own risks as well as presenting the parties with their own rewards.  The risks must be carefully weighed against the developer's commercial objectives.

Armitage Sykes have experience in dealing with all types of Development Agreements.  Our access to dedicated professionals within the market, such as accountants and surveyors, means that not only can we guide you through the myriad of legal and practical implications of entering into such an agreement but we can also help ensure that your commercial objectives are also met.