According to some statistical studies, the use of joint ventures in real estate business has tremendously increased in the period between 1998 and 2002. By the end of 2002, joint venture activity had grown two to three times faster than the underlying total assets of real estate investment trusts. Several business owners and companies want to form some joint ventures to help each other grow without the need for outside funding. In this article, we will discuss the helpful ways that you should remember while making your real estate joint venture agreement. Please continue reading!

FREE 7+ Real Estate Joint Venture Agreement Samples

1. Real Estate Partnership Agreement Template

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2. Real Estate Joint Venture Proposal Template

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3. Real Estate Confidentiality Agreement Template

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4. Joint Venture Agreement Template

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5. Real Estate Joint Venture Agreement

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6. Model Joint Venture Agreement

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7. Real Estate Development Joint Venture Agreement

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8. Real Estate Joint Venture Agreement Templates

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What is a Real Estate Joint Venture Agreement?

A joint venture agreement is a type of business agreement that is usually used by companies or individuals such as artists, musicians, movie production companies, as well as real estate investors who are entering into a one-time project, investment, or business opportunity. Typically, the two parties will establish a new company such as a Limited Liability Company (LLC) to perform operations or to own the investment.

How to Create a Real Estate Joint Venture Agreement

If you’re a real estate owner who wants to obtain access to wider markets and additional capital, then you may consider having a joint venture agreement along with other reliable real estate owners that you know. Doing a joint venture is really helpful in businesses to have shared resources, shared expenses, access to additional knowledge and expertise, and increased credibility.

But, before you start, you must first draft and finalize a joint venture agreement to sign. And, you can easily make that with the tips below:

Ascertain that you correctly specify the names and every detail of the parties involved. Indicate the parties’ company or business names and organizations clearly and avoid having some typographical errors, particularly in the spelling of their basic information. If you don’t verify the details in the document, it will cause you some troubles, specifically legal contract issues and burdens. 

2. Deliberate on the time period of agreement

Have some careful deliberation about the time period allotted for the one-time project of the joint venture. Collaborate with your potential business partners and convey your ideals as well as hear and consider their sides. Then, state clearly the dates in the contract together with other significant dates to remember. 

3. Be cautious while using some terms

In order to avoid confusion,  you need to use terms that are related to real estate business. Incorporate exact definitions in the agreement. Take note that you must become straightforward and transparent, protecting yourself from unintended liabilities and responsibilities. Thus, you need to state the number of times you permit your business partner to set up contract amendments

4. Specify important clauses

You should  specify important clauses about the agreement termination, late payment fees, information disclosure, and confidentiality to avoid any contract disputes while you’re in the joint venture in the future.

5. Write the main purpose and entirety of your agreement 

A scope of work or scope statement in a joint venture agreement can become lengthy, especially when you include all the significant details. It is much recommended that you write the main purpose, goal, requirements, rules and entirety of your business contract. 

FAQ

What should be in a joint venture agreement?

A joint venture agreement should include the object and scope of the joint venture, local and foreign investors equity participation and agreement to a future issue of capital, management committee, financial arrangements, the composition of the board, etc.

Is a joint venture agreement legally binding?

A joint venture established by companies often builds separate business entities for that purpose. All partnerships, limited liability companies or corporations grant them to pool funding and set up boundaries for sharing their knowledge and resources.

How do you set up a joint venture?

To set up your joint venture arrangement with another party, create a new separate legal entity for the joint venture business with each party having an ownership interest in the newly formed entity.

Do joint ventures need to be registered?

No. Joint ventures are not required to file formal paperwork or documentation of status with state or federal governments. Instead, development of a joint venture is contractual and involves one business entity entering into a contract with another entity.

Therefore, the relative use of joint ventures in real estate business becomes higher the larger the properties become. The buildings during the period of joint venture will greatly acquire a higher share as jointly held properties may be held longer than wholly owned properties. So, joint venture announcements lead to more positive market reactions. To assist you in creating a joint venture agreement for your business, click and download our templates here!

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