This involves partnering with an individual or an entity that owns a piece of land to jointly develop a project on the land and share proceeds, and in some cases, manage the property. 

JV’s are very common in real estate projects. 

It has great benefits to both the landlord and the real estate developer. It saves the developers from committing huge cash to purchase lands for projects. Whereas for the landlord, it gives them the opportunity to make good returns on the their lands without having to commit funds for the development. 

Here’s what you need to know about joint ventures in Ghana, for real estate development. 

Legal Framework:

Ghana’s legal system recognizes joint ventures, and the process is governed by the Companies Act  and other relevant laws and regulations.

Use the services of a qualified lawyer to draft a comprehensive joint venture agreement that outlines the roles, responsibilities, and profit-sharing arrangements between the parties involved.

Land Acquisition and due diligence

Identify the land suitable for your project and ensure that all necessary permits, approvals, and titles are obtained. The Ghana Lands Commission is responsible for land matters in the country. Verify the land’s ownership and confirm that there are no disputes or encumbrances associated with it.

Ask the landlord for documents to prove ownership. Documents such as land title certificate or indenture. Verify these documents with the Lands Commission. Make sure you investigate the Land thoroughly before proceeding. 

The landlord needs to conduct due diligence on the developer to ensure if they have the financial capacity to execute the project from beginning to the end. Abandoning the project halfway due to insufficient funds leads to so many problems and may finally end up in a legal tussle. It is expedient that the Landlord convinces himself about the Real Estate developer’s capacity to execute. 

Project Proposal:

Develop a detailed proposal outlining the objectives, scope, budget, and timeline of the joint venture project. Present the proposal to potential partners or entities for discussion

Partnership Agreement:

Negotiate and draft a comprehensive partnership agreement that clearly defines the roles and responsibilities of each party, the financial contributions, and the profit-sharing mechanism. Most landlords do  30/70 profit sharing.The agreement should also outline dispute resolution mechanisms and exit strategies.

Ensure that the joint venture partnership is in line with all relevant laws, regulations, and permits specific to the industry. This may include environmental, zoning, and business operation permits.

Financing

The developer provides funds for the execution of the project. Costs may include permits, construction and advertisements. The landlord’s equity or investment in the venture is the portion of land used for the development. There are tax implications as well which needs to be discussed. 

Dispute Resolution

A clear mechanism should be defined to resolve disputes that may arise, be it arbitration, mediation or a court action.  

Monitoring and Reporting:

Implement a robust monitoring and reporting system to track the progress of the project and ensure transparency

Joint Venture projects require effective communication, trust and clear understanding of each party’s responsibilities to be successful. Legal advice and due diligence are essential to navigate the complexities of joint ventures and to ensure compliance with local laws and regulations.