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Land JV with Build-and-Sell Business Framework

1. Objective: The aim of this collaboration is to efficiently develop a residential property by leveraging the resources and expertise of accredited investors from various sectors (construction, design, building materials) and a reliable brokerage team to sell the property upon completion. All parties involved will share revenue based on the agreed value of products and services provided.

  

This is just an agreement template that could always be customized within the framework agreed by all the parties.

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2. Key Participants:

  1. Landowner: Contributes the residential lot as their investment into the joint venture.

  2. Accredited Investors (iMIC Synergy):

    • Architect/Design Firm: Responsible for creating the architectural designs and overall aesthetic vision.

    • General Contractor: Manages the construction process, ensuring that the project is delivered on time and on budget.

    • Building Materials Suppliers: Provides construction materials (e.g., cement, tiles, fixtures) with cost-efficient, high-quality products.

    • Real Estate Broker: Tasked with marketing and selling the property immediately upon completion, utilizing their network to find buyers.

3. Phases of the Joint Venture:

Phase 1: Pre-Construction

  • Landowner and iMIC Synergy Investors sign a JV agreement defining roles, investment terms, and revenue-sharing model.

  • Architect/Design Firm develops the initial concept, including blueprints, 3D renderings, and specifications.

  • General Contractor and Building Materials Supplier provide cost estimates and project timelines for construction based on design.

  • Real Estate Broker begins pre-marketing the property to generate buyer interest.

Phase 2: Construction

  • General Contractor executes the construction, coordinating with Building Materials Suppliers to ensure timely delivery of resources.

  • Design Firm oversees the implementation of aesthetic elements and ensures the build adheres to approved plans.

  • Landowner monitors progress, ensuring the JV partners are working towards shared goals and within budget.

Phase 3: Sales & Handover

  • Real Estate Broker actively markets the completed property and engages buyers.

  • Once the property is sold, the proceeds are collected, and each participant receives their agreed-upon share of the revenue.

4. Revenue Sharing Model:

Revenue from the property sale will be distributed among the stakeholders based on the following framework:

  • Landowner: Receives a percentage of the sale as compensation for providing the land, typically a negotiated portion based on the land's valuation.

  • Architect/Design Firm: Receives a percentage based on their agreed service fees, calculated against the final sale value.

  • General Contractor: Earns a share based on construction costs plus a profit margin.

  • Building Materials Suppliers: Share revenue according to the value of the materials provided, with a percentage margin on top.

  • Real Estate Broker: Typically receives a standard commission (e.g., 5%) based on the sale price.

Each party’s percentage will be predefined and calculated based on the final sale price of the property.

5. Legal and Financial Structure:

  • The collaboration is formalized through a joint venture agreement outlining investment terms, roles, and revenue-sharing mechanisms.

  • A single-purpose company (SPC) or special-purpose vehicle (SPV) may be established to handle finances and contractual obligations.

6. Risk Management and Exit Strategy:

  • Each party bears responsibility only for their area of expertise. The landowner risks their lot, the contractor risks the quality and timeline of construction, while the broker and supplier are responsible for timely execution of their services.

  • An exit strategy must be discussed in case the property does not sell within a given timeframe. This may involve renting the property until a sale is viable or exploring alternative buyer options.

7. Final Deliverables:

Upon completion and sale:

  • The landowner gains a return on their land investment.

  • The Architect/Design Firm, Contractor, and Suppliers are compensated based on their contributions.

  • The broker finalizes the sale and receives commission based on the sale price.

This model provides a structured, equitable method for landowners and accredited investors to collaborate on developing and selling residential properties, ensuring all parties are compensated fairly for their contributions.

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​​JOINT VENTURE AGREEMENT ( DRAFT  TEMPLATE  AGREEMENT)

(For Build-and-Sell Business Model)

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This JOINT VENTURE AGREEMENT (hereinafter referred to as the "Agreement") is made and entered into this __ day of _______, 2024 by and between:

Lot Owner:

  • Name: [Name of Lot Owner]

  • Address: [Address]

  • Contact Number: [Phone]

  • TIN: [Taxpayer Identification Number]

AND

Accredited Investors (collectively referred to as "Collaborators"):

  1. General Contractor:

    • Name: [Name of Contractor]

    • Company Name: [Company Name]

    • Address: [Company Address]

    • TIN: [Taxpayer Identification Number]

    • Authorized Representative: [Representative Name]

  2. Architect/Design Firm:

    • Name: [Name of Architect]

    • Company Name: [Company Name]

    • Address: [Company Address]

    • TIN: [Taxpayer Identification Number]

    • Authorized Representative: [Representative Name]

  3. Building Materials Supplier:

    • Name: [Supplier Name]

    • Company Name: [Company Name]

    • Address: [Company Address]

    • TIN: [Taxpayer Identification Number]

    • Authorized Representative: [Representative Name]

  4. Real Estate Broker:

    • Name: [Broker Name]

    • Company Name: [Company Name]

    • Address: [Company Address]

    • TIN: [Taxpayer Identification Number]

(Hereinafter collectively referred to as "Parties").

RECITALS

  • WHEREAS, the Lot Owner owns a parcel of land located at [Lot Address, Legal Description];

  • WHEREAS, the Collaborators are accredited investors through iMIC Synergy, providing architectural design, construction services, building materials, and brokerage services;

  • WHEREAS, the Parties desire to collaborate on the development and sale of the property under a "Build-and-Sell" business model;

  • NOW, THEREFORE, for and in consideration of the foregoing premises, the mutual covenants and promises hereinafter set forth, and other good and valuable consideration, the Parties agree as follows:

1. PURPOSE OF AGREEMENT

The purpose of this Agreement is to establish a Joint Venture between the Lot Owner and the Collaborators for the purpose of constructing a residential building on the Lot Owner's property and selling it upon completion. The revenue from the sale shall be shared among the Parties based on their respective contributions, as specified in this Agreement.

2. DESCRIPTION OF THE PROJECT

  • Lot Location: [Address of Lot]

  • Project Type: Build-and-Sell Residential Property

  • Estimated Completion Date: [Insert date]

  • Estimated Sale Price: [Insert estimated value]

  • Architectural Plans: [Summary of design specifications]

  • Timeline: A detailed construction schedule to be attached as Annex A.

3. CONTRIBUTIONS AND RESPONSIBILITIES OF PARTIES

3.1. Lot Owner

  • Contribution: The Lot Owner contributes the lot as capital in this joint venture.

  • Responsibilities: Ensures clear title and necessary permits for development are obtained.

3.2. General Contractor

  • Contribution: Manages the construction of the residential property.

  • Responsibilities: Supervision of all construction activities and delivery of the completed project as per the approved plans and timeline.

3.3. Architect/Design Firm

  • Contribution: Provides the architectural design and supervision during the construction.

  • Responsibilities: Ensures that the design and aesthetic specifications are adhered to throughout the construction.

3.4. Building Materials Supplier

  • Contribution: Provides all necessary building materials for the project.

  • Responsibilities: Timely delivery of high-quality materials as agreed in the supply contract (to be attached as Annex B).

3.5. Real Estate Broker

  • Contribution: Markets the property and finds a qualified buyer.

  • Responsibilities: Ensures that the property is sold at the best possible price, as per market conditions.

4. REVENUE SHARING

The proceeds from the sale of the developed property shall be distributed as follows:

  • Lot Owner: [Insert percentage] % of the net sale price, in recognition of the lot contribution.

  • General Contractor: [Insert percentage] % of the net sale price, based on agreed construction costs and service fees.

  • Architect/Design Firm: [Insert percentage] % of the net sale price, based on design services rendered.

  • Building Materials Supplier: [Insert percentage] % of the net sale price, based on the value of materials supplied.

  • Real Estate Broker: [Insert percentage] % of the gross sale price as commission for finding the buyer.

5. OBLIGATIONS OF PARTIES

Each Party agrees to:

  • Comply with the terms of this Agreement.

  • Perform its role diligently and professionally, ensuring the project is completed on time and within budget.

  • Adhere to all applicable Philippine laws and regulations, including permits and licenses for the development and sale.

6. DISPUTE RESOLUTION

In case of disputes arising from or related to this Agreement, the Parties agree to resolve the matter amicably. If unresolved, disputes will be submitted to arbitration in accordance with the rules of the Philippine Dispute Resolution Center, Inc. (PDRCI).

7. TERMINATION

This Agreement may be terminated:

  • By mutual written consent of the Parties.

  • If the project is not completed within the agreed-upon timeline, with a grace period of [X] months.

  • If any Party materially breaches the Agreement.

8. MISCELLANEOUS

  • Entire Agreement: This Agreement constitutes the entire understanding between the Parties.

  • Amendment: Any amendment to this Agreement must be made in writing and signed by all Parties.

  • Severability: If any provision of this Agreement is found to be invalid, the remaining provisions will remain in effect.

SIGNATURES

IN WITNESS WHEREOF, the Parties have hereunto affixed their signatures this __ day of ______, 2024 in [City, Philippines].

Lot Owner:

[Lot Owner's Name]
(Signature)

General Contractor:

[Name of Contractor]
(Signature)

Architect/Design Firm:

[Name of Architect/Design Firm]
(Signature)

Building Materials Supplier:

[Name of Supplier]
(Signature)

Real Estate Broker:

[Name of Broker]
(Signature)

CONFORME:

The undersigned hereby acknowledges their agreement and conformity with the terms and conditions of this Agreement.

[Name of Witness/Party]
(Signature)

ACKNOWLEDGMENT

REPUBLIC OF THE PHILIPPINES}
CITY OF ____________} SS.

BEFORE ME, a Notary Public for and in the city of _______________, this __ day of _______, 2024, personally appeared the following:

  • [Names of signatories] known to me and identified as the same individuals who executed the foregoing Joint Venture Agreement, and acknowledged to me that the same is their free and voluntary act and deed.

WITNESS MY HAND AND SEAL on the date and at the place above written.

Notary Public:

[Name of Notary Public]
Notarial Commission No. ____
[Office Address]
Doc. No. ____
Page No. ____
Book No. ____
Series of 2024.

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