Structuring Real Estate JVs: Capital Contributions, Distributions, Allocations, Taxes, Governance, Exit Strategies
Negotiating Joint Venture Deals in Property Development to Minimize Financial and Legal Risks
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
Intermediate
- work Practice Area
Real Property - Transactions
- event Date
Thursday, July 27, 2017
- schedule Time
1:00 PM E.T.
- timer Program Length
90 minutes
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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This CLE course will provide real estate and finance counsel with a review of key legal and financial issues when forming a real estate joint venture for property development. The panel will outline strategies to minimize sponsor and capital partner risk and to minimize future disputes. The panel will offer approaches to address governance and control of the venture, capital contributions and capital calls, related party agreements, and exit strategies.
Buying or developing real estate through joint ventures has many advantages, particularly as an alternative source of financing or to deal with high prices in desirable, competitive markets. The joint operating agreement and other related documents are very complex and fiercely negotiated.
Real estate and finance counsel need to understand all of the pertinent issues to successfully allocate control and address economic issues when negotiating and structuring a joint venture operating agreement. Tax structure and potential tax pitfalls must be anticipated and addressed at the outset of the deal.
Counsel for all parties must anticipate disputes over capital calls and negotiate potential penalties for a party unable to contribute additional capital and negotiate buy-out terms. Exit rights and strategies must be carefully thought out and clearly addressed in the operating agreement or other documents.
Listen as our panel of real estate and finance attorneys explains the legal issues to consider at the formation of a real estate joint venture to minimize financial and legal risk for owners, sponsors and capital partners. The panel will outline effective ways to determine governance and control of the venture, as well as capital contributions and fees, related party agreements, and exit strategies when structuring the operating agreement.
- Capital contributions and capital calls
- Distributions, allocations and other tax provisions
- Governance and control issues
- Allocating financial and legal liabilities
- Related party agreements
- Exit strategies
The panel will review these and other key issues:
- What are the current legal trends regarding the establishment and operation of joint ventures?
- How should governance and control issues be determined?
- What are current issues relating to governance dispute resolution and buy-out terms?
- What risk allocation and risk shifting measures should be included in the joint venture operating agreement to protect the real estate owners and equity partners?
- What are the tax pitfalls with phantom income for the party contributing the property to an LLC and how should this issue be addressed up front?
