Land prices in Kenya have risen, hence posing a challenge to developers and land owners. This has prompted land owners and developers to enter into joint venture agreements which is a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task, in this case being undertaking a development.
Since the cost of starting new projects is generally high, a Joint venturecan help to mitigate risk by sharing it across the parties as they are all equally invested in the project. They then also share the resulting profits.
The land owner contributes the land while the developer finances the project.
However it is important that the parties have a shared vision and ethos, the structure, resourcing and governance is clear from the outset.
Factors that should be taken into consideration in the Joint Venture Agreement are as below:
1. The business structure;
2. Tax matters;
3. Project consultants;
4. Change of user approvals;
5.Funding and cash extractions;
6.Profits and losses;
7.Default;
8.Dispute resolution. etc.
Please note that this is just a brief and one should not deter from seeking further legal advise, for any clarifications on the same do not hesitate to contact, legalserviceskenya@gmail.com
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