Take Part In The Ongoing Urbanization By Selecting Good Real Estate Development Companies
by Paul Wright Tax Accountant Toronto - A Simple Checklist for ChEverything around us is witnessing a major
boom, in the real estate sector in most of the countries. This in turn has
given rise to a number of real estate
joint ventures agreements, getting signed between real estate developers
and landowners. This process usually takes place between landowners who have mostly
inherited their properties, and have no insight into the legal work involved. These
landowners get involved in joint venture agreements with real estate developers
and many a times find a lucrative deal for their land. The lands which were locked
away for many years with no signs of the development get transformed when these
development projects take off.
There are many good business and accounting reasons to participate in a real estate joint venture.
Getting a good deal with a business that has complementary abilities along with
resources, such as finance, technology makes good sense. Let us now find the
underlying cause of some of the reasons partnerships formed by joint venture
are becoming popular in day-to-day life.
A joint venture is a profitable alliance
between two or more parties for a specific project
Partnerships with joint venture real
estate investors can be similar but in fact can have significantly
different applications for those involved. A partnership usually involves in a
continuous, long-term relationship, whereas a joint venture is based on a
single business project. Both the parties who enter in joint ventures, mostly
gain individual benefits, and share the project objective. This can be taken
into consideration for a product or intellectual property rather than collated
profits.
Equal Profit Distribution
The key point taken into consideration while getting into a partnership
with real estate development companies is how each party should split profits that they make from the
same venture. The members should be compensated equally and fairly to let both
parties work in harmony.
Capital Investment
The real estate investment companies’
do require an agreement, which needs to specify the exact amount of capital
contributed from each member. Additionally, it should also specify when this
capital is due.
Proper Management and Control
The real estate joint ventures
agreement is expected to specify in details, the exact structure of the agreement
and the responsibilities of both parties regarding the management of the
project.
Entry and Exit mechanism
It is already discussed above how both parties interested in build to suit commercial estate can get
into an agreement. However, it is equally essential for an agreement to detail
how and when it will end. Usually, it is in the best interest of both parties
to make the dissolution of a joint venture agreement as economical by possibly
avoiding legal fees. The agreement must also list out all the events that,
might allow both the parties to trigger a premature dissolution.
A joint venture is an excellent opportunity to enhance the overall performance
of the business. Whether it is for buying, selling, or just getting started,
this teamwork strategy is advantageous for several reasons. The real estate development companies
combine complementary strengths for the good of a real estate business. A joint
venture provides experience for real estate developers, which may be of fruitful
assistance in future endeavours.
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Created on Oct 6th 2018 05:03. Viewed 343 times.