JOINT VENTURE CHECKLIST

This Checklist is intended to raise important issues for you to consider for your Joint Venture. It is not a substitute for legal advice.

Your Joint Venture Agreement should address the issues that you consider important for your particular Project. You should not let this Checklist limit the issues you consider.

Once you have completed this Checklist, please return it to David Netherton by email () or fax(07 5479 4953) so we can prepare your Joint Venture Agreement.

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WHO ARE THE PARTIES TO THE JOINT VENTURE?

It is important to know the full and proper names for the Parties to the Joint Venture.

Please list the full names of the Parties, including any relevant Trusts.

Full Name
Contact details (egaddress, phone, fax, email)
Authorised Signatories
(eg Directors/Trustees)
Full Name
Contact details (egaddress, phone, fax, email)
Authorised Signatories
(eg Directors/Trustees)
Full Name
Contact details (egaddress, phone, fax, email)
Authorised Signatories
(eg Directors/Trustees)

Have all relevant Trusts been established?YesNo

Have all relevant Companies been incorporated?YesNo

WHAT TYPE OF PROJECT WILL THE JOINT VENTURE UNDERTAKE?

It is important that the Parties agree on exactly what work is involved in the Project.

No Construction / No Construction
Obtain Development Approval only
Subdivision / Subdivision
Body Corporate Required
Other
Construction / House
Duplex
Residential Unit Building (Number of units )
Commercial/Industrial Building
Other
Renovation / Renovate current dwelling
Add Granny Flat
Add Second Dwelling
Demolish Current Dwelling
Other
Other / Other

It is important that the Parties agree on the long term plan for the project after the work is completed.

Rent / Rent entire property
Rent some lots or units ( )
Who is to determine the rent price ()
Sale / Sell all lots or units
Sell some lots or units ()
Minimum price the lots or units will be sold for ()
Who is to determine the sales price ()
Other / Other

What is your target location for the project? (eg suburb or ‘Qld mining town’):__

WHAT ARE THE PROJECT TIME FRAMES?

Your Joint Venture is likely to have three (3) phases: Buy, Build and Rent/Sell.

It is important that the Parties agree on a target for each stage of the Project.

What are the intended Project timeframes?

Phase / Action / Timing
Buy
eg locate property
enter Put and Call Option
perform due diligence
apply for finance
apply for development approval
settlement of contract for purchase
Build
eg subdivide land
Construct dwelling
Rent/Sell
eg appoint agent
market property
sell property

What is the total estimated project timeframe?

FEASIBILITY AND FINANCIAL GOALS

Have you performed a feasibility of the Project?

If so,please attach a copy to this Checklist.

What is the financial goal of the Project?

What is the financial goal of the each Party and by what date do you expect this result?

Party 1

Party 2

Party 3

WHAT CAPITAL IS REQUIRED TO COMPLETE THE PROJECT?

Have you prepared a budget of the expected cost of the Project?

If so, please attach a copy to this Checklist.

What is the expected capital required to complete the Project?

Over what timeframe will the capital be required?

WHAT CAPITAL CONTRIBUTIONS WILL BE REQUIRED OF THE PARTIES?

The Parties should be clear from the outset the money they will be required to contribute to the Joint Venture and when that money must be contributed.

What capital contribution will be required?$

When must the capital contribution be made?(date)

How is the capital contribution to be made and stored?

(eg Joint Venture bank account, stakeholder’s bank account)

Does the capital contribution differ between the parties? If so, describe the requirements.

(eg party 1 contributes $100,000, party 2 contributes $200,000)

Who will control the monies? (eg dual signatories)

WHAT BORROWINGS ARE REQUIRED?

The Parties should agree on the anticipated borrowings and the nature of the facility.

What are the expected borrowings required to complete the Project?

Over what timeframe will the borrowings be required?

WHAT ROLES DO THE PARTIES FILL?

For each of the parties, consider their contribution.

Party / Land Owner / Financial / Building Work / Other

WHO ARE YOUR TEAM OF PROFESSIONALS?

The parties should agree on who will be engaged to perform work for the Joint Venture.

Who will fill the following roles?

Lawyer

Accountant

Builder

Financier (bank)

Town Planner

Surveyor

Real Estate Agent

Project Manager

WHAT IS THE ROLE OF PROJECT MANAGER?

If you will have a Project Manager, all parties should be clear on what they will do and when.

Who is the Project Manager?

What are the terms of their role?

(eg limits of their authority, ability to make design, budget and legal decisions)

If there is a monetary limit to which the Project Manager is free to spend, what is it?$

WILL THERE BE A PROJECT COMMITTEE?

You should decide if you will delegate any of the decisions to a Committee comprising representatives of some or all of the parties.

Will there be a Project Committee?YesNo

If so, what decisions will they make?

(eg colour choices, design choices etc.)

How often will the Project Committee meet?

(eg twice per quarter, once a week)

WHO WILL ADMINISTER THE FINANCIAL SIDE OF THE JOINT VENTURE?

Aside from the actual Project, you may have specific ideas about how the finances are to be managed.

Will the financial decisions be made by a meeting of the Joint Venturers?Yes No

Will the voting be:proportionate to ownershipequal between each joint venturer

WHAT WILL BE THE DISPUTE RESOLUTION PROCEDURES?

The parties may not see eye to eye at all times. What happens when you cannot agree on how the Project is to be managed?

Must the party enter mediation?Yes No

Who will be the mediator?Chosen at the relevant time by the parties

Chosen at the relevant time by the president of the Law Society

WHAT HAPPENS IF A PARTY DIES?

It is important that the parties agree on what is to happen if one of the parties dies?

If a party dies, their Estate:Will become a party to the Joint Venture with full rights

Will become a party to the Joint Venture with no voting rights

Will be entitled to demand payment for its interest

Must sell its interest to the other Joint Venturers if they elect

Any other provisions? (eg different rules for different Joint Venturers)

Will the parties obtain life insurance to protect the Joint Venture?YesNo

Do you require a referral for Life Insurance?YesNo

WHAT ARE THE CONDITIONS FOR EXITING THE JOINT VENTURE?

A party may wish to leave the Joint Venture after commencement, but before completion of the Project. You must agree to what circumstances will allow a party to leave the Joint Venture.

A party can leave the joint Ventureat their choice

with the approval of the majority of the parties

with the unanimous approval of the parties

if they can find a buyer for their interest

When a party leaves the Joint Venture, they will receive payment for their interest

At the time they leave

Within a certain time after they leave, namely

At the completion of the Project

WHAT HAPPENS ON COMPLETION OF THE PROJECT?

You should have a clear understanding on what happens to the profits on completion of the Project.

To whom the profits will be distributed and in what order?

(eg equally to all Joint Venturers, firstly in repayment of capital and then equally to all Joint Venturers)

order?

How will ‘profit’ be calculated and when will the profit be distributed?

(eg if not selling the lots/units, three market valuations to be obtained and take the average

THE NEXT STEP…

Return this Checklist to David Netherton by email () or fax (07 5479 4953) and we can assist you by preparing your Heads of Agreement or Joint Venture Agreement.

Pacific Law

Phone: 07 5443 4744Po Box 1669, Sunshine Plaza 4558

Fax: 07 5479 4953

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