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Too many areas to cover........it's overwhelming, hence, the need for expert JV lawyer.
Thanks Thomas
Thanks Thomas
Partnership Split on Commercial Land
- Thread starter REInvestors888
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- reasonable jv split
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Is X name on title and mortgage good enough to have control over his land to be contributed to the partnership?
How about Z interest? How can we protect it? Should he be added to the title and mortgage?
Both interests should be protected especially the money partner, right?
How about Z interest? How can we protect it? Should he be added to the title and mortgage?
Both interests should be protected especially the money partner, right?
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The investor gets shares, trust units or LP units with a share, trust unit or LP unit subscription doc and associated share, trust or LP agreement which lays out the terms. That is commonly done in investments. Not so common, but doable, is a second mortgage.
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Instead of second mortgage, is it possible to register the JV/partnership as a Note or Caveat on title?
This project though small will likely take 3-5 years. Should it be JV or LP set up? Which is simple to implement?
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Yes you can register a JV, trust or shareholder agreement on title. Keep on mind that a JV is a concept, implemented via a legal ownership structure.
LP, shares, trust or undivided interests are legal structures.
LP, shares, trust or undivided interests are legal structures.
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JV agreement with caveat on title may be suitable in this scenario. LP may be too much to handle.
Any suggested poison pills to prevent Z taking full control of the JV? What if a new partner wants to join? What's the basis for valuation? Assessed value of the land and project at the time?
Any suggested poison pills to prevent Z taking full control of the JV? What if a new partner wants to join? What's the basis for valuation? Assessed value of the land and project at the time?
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Z being the investor ? yes that could happen if Z is a mortgage holder in first position and you promised to pay 15%/year and you do not as the land owner. Then Z will foreclose.
If Z doesn't have a mortgage but shares or an LP agreement then those allow for remedies too, as spelled under the business corporation act or the LP agreement.
Usually yes, value of project at the time. Value is a function of future potential, obviously, as a piece of dirt zoned 24 stories is far worth more than one zoned duplex although both have nothing on it right now.
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There is no mortgage with Z. Purely money contribution. JV will be registered on title as caveat to protect Z interest being money partner.
How about using estimated total project cost at completion?
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JV are always a function of operator, market, risk, upside potential and ROI potential.
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Got it. Thanks Thomas.