A property joint venture involves two parties coming together for the purpose of buying a piece of real estate. It is different from a partnership because it only involves the one real estate transaction, as opposed to an ongoing relationship.
This type of property venture typically brings together two types of parties. One party tends to be the one that puts up the money for purchasing the property. The second party tends to be the more hands-on person or the one involved in the daily operations of the building or real estate property.
A property joint venture typically includes a contract or an agreement between the two parties that are involved. The contract or agreement spells out in detail the responsibilities that each party of the joint venture have. The agreement also spells out what each party of the joint venture walks away with when the joint venture comes to an end.
The end result of a property joint venture is that both parties involved walk away with a profit or benefit when the deal ends. It is meant to be a mutually beneficial arrangement that starts and ends with a specific purpose in mind.
Some of the elements that are included in a property joint venture agreement include the commencement date of the property joint venture. The agreement also states the end date of the agreement, because joint ventures are not perpetual agreements. While the agreement may not state a specific date, the end of the agreement may be when a particular milestone is reached, as in the building sells for a specific amount of money.
The property joint venture should also have details on what happens if one of the parties in the venture dies. Additionally, there should be some verbiage in the agreement that states the procedure in case there is a dispute, disagreement or some other legal issue between the parties in the property joint agreement.
Silent partners may also be part of a property joint agreement. This is an exception to the typical joint venture situation in that silent partners may put up the capital for the real estate, but do not really get involved in the day-to-day operations and situations dealing with the real estate property.