Legal Skills: Property joint ventures

Audience

• In-house lawyers
• Surveyors
• Bankers
• Property developers and advisers
• Investors
• Commercial lawyers in private practice

Skills Gained

• 1. Develop your knowledge in how to successfully structure and carry out the deal efficiently and effectively
• 2. Know where common mistakes occur and how to avoid them
• 3. Learn what issues are currently affecting this area of the market, and how they may impact on business in the future
• 4. Understand the various funding strategies plus the risks and advantages involved with each option

Course Outline

Introduction to ways of sharing the risk

• Why share the risk?
• Factors to consider
• Commonly used structures

Traditional joint venture companies

• Reasons for a corporate vehicle
• Capital funding
• Management - relationship between board and shareholders
• Minority shareholder protection
• Transfer of shares
• Termination
• Documentation - relationship between articles and shareholders' agreement
• Exits and disputes

Equity sharing leases

• What are equity sharing leases?
• Is the landlord's income to be based on rents received or rents receivable?
• Should rent include all sums which a tenant pays under a lease? - If so, what should be the permitted deductions?
• How much control should the landlord retain?
• What restrictions should there be on the tenant's ability to grant occupational leases?
• What happens when the tenant wants to redevelop?

Tax issues for property joint ventures

• Corporate joint ventures
• Limited partnerships
• Equity sharing leases
• REITS
• Unit trusts and other vehicles

Valuation issues

• Purpose of valuation
• Which interest should be valued?
• Discounts for part ownership?
• Non-assignability clauses
• Termination clauses
• Effect of the Financial Services and Markets Act

Offshore property unit trusts

• Structure
• Tax efficiency
• Regulatory requirements
• Setting one up
• Investing in an existing OPUT

Limited partnerships

• Structure
• Limit on numbers
• Level of contributions
• Carried interests
• Transfer of partnership interests
• Management role
• Borrowing
• Regulatory requirements
• Overseas limited partnerships
• Limited liability partnerships

Raising finance

• Types of development risk
• Institutional v banks
• Terms of bank finance
• Rents and the ability to leverage debt
• The equity gap
• Equity from developers, contractors and landowners
• Pre-development equity syndicates
• Mezzanine finance
• Long-term finance
• Providers of finance

Funding agreements

• Traditional forward funding agreements
• Developer's duties
• Fund's obligations and maximum commitment
• Profit calculation
• Enhanced project management agreements