Joint Venture Agreements
Joint venture agreements for businesses and property developments, recording what each party contributes, who controls what, how profits are shared and how the venture ends.
- Incorporated and unincorporated joint ventures
- Property development joint ventures between landowners and developers
- Funding calls, default and exit provisions
- Property and commercial work handled by the same team
Working together on a project
Structure First, Then the Agreement
A joint venture can be run through a company, a unit trust or a contract between the parties. The choice affects tax, liability and how the venture is wound up.
In an incorporated joint venture, the parties hold shares in a company that carries on the project, and a shareholders agreement governs the relationship. In an unincorporated joint venture, the parties contract directly with each other, often holding the project assets as tenants in common, and the agreement needs to be drafted so that the arrangement is not treated as a partnership unless that is intended.
In a property development joint venture, a landowner commonly contributes the land while a developer contributes expertise, management and funding. The agreement then deals with planning approval, construction, funding calls, sales and the distribution of proceeds, and the land and GST questions sit alongside the commercial terms.
What it covers
What the Agreement Covers
The agreement is prepared around the project and the contribution each party is making.
Contributions
Land, cash, services and expertise contributed by each party, and how each is valued.
Management and Control
How decisions are made, who manages the project day to day and which matters need unanimous approval.
Funding Calls
How further funding is called, and what happens if a party cannot meet a call.
Profit and Distributions
How proceeds are applied and shared, including the order of repayments and returns.
Property Development Terms
Planning approval, construction, presales, the sale of completed lots and the protection of each party’s interest in the land.
Default and Exit
Events of default, buyout rights, deadlock and how the venture ends when the project is complete.
Fixed fees for this work are published on our pricing page.
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How We Prepare a Joint Venture Agreement
Understand the project
The parties, the project, each contribution and the structure your accountant has recommended.
We confirm the fee
A fixed fee in writing before any work starts. Development projects are quoted once we understand the scope.
We prepare the agreement
The draft is sent with a summary of the key terms and the decisions still open between the parties.
Negotiation and signing
We deal with the other party’s comments and arrange signing, together with any supporting property documents.
Before you start
What to Have Ready
Joint ventures succeed or fail on how clearly the parties agreed the commercial terms at the outset. These are the points to settle first.
The project: What the venture will do, the site or business involved, the expected timeline, and when the venture is intended to end.
Each party’s contribution: Land, cash, finance, development expertise, labour or equipment, and the value placed on each contribution.
Control and funding: Who makes day-to-day decisions, which decisions need both parties, how further funding is raised, and who guarantees any bank finance.
Returns and exit: How proceeds are shared, in what order costs and loans are repaid, and what happens if a party wants out early or the project does not proceed.
Common Mistakes
Starting work on a handshake: Development joint ventures often begin before anything is signed, leaving the landowner and developer exposed if they later disagree.
No plan for a funding shortfall: Cost overruns are common, and an agreement that does not deal with them leaves the parties negotiating under pressure.
Unclear title arrangements: Where only one party holds title to the land, the other party’s interest needs to be protected, for example by caveat or mortgage.
Tax treatment left too late: GST, the margin scheme and income tax outcomes depend on how the venture is structured, so your accountant should be involved early.
Points Worth Knowing
Partnership risk
An unincorporated joint venture can be treated as a partnership if the agreement and the parties’ conduct point that way.
Protect the landowner
Where land is contributed, the agreement should secure the landowner’s position until the developer’s obligations are met.
Protect the developer
A developer funding a project on land it does not own needs security for its interest, such as a caveat or mortgage.
GST and the margin scheme
The GST treatment of sales, including whether the margin scheme is available, should be settled at the start.
Stamp duty
Moving land into a joint venture structure may attract duty, so the structure is checked before any land is transferred.
Plan the exit
Every joint venture ends, so the agreement should deal with completion, sale and early exit from the outset.
Our role is to document the joint venture. We do not act where a dispute between the parties has already arisen.
Talk to Us About Your MatterDevelopment joint ventures usually need supporting property documents as well.
Joint Venture FAQs
What is the difference between a joint venture and a partnership?
Should the joint venture use a company?
Can you prepare a property development joint venture?
What does a joint venture agreement cost?
What happens if a party cannot meet a funding call?
Who holds the land in a property development joint venture?
Can a joint venture agreement be changed later?
Have a question that is not answered here?
Contact UsPlanning a Joint Venture?
Tell us about the project and the parties, and we will confirm a fixed fee before any work starts.
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