Question:
If I know 2 unrelated people that agree to combine their resources to buy property ie a joint venture. What is the best way for them to do that legally.
Answer:
The options to hold title together appear to be:
- Corporation,
- Partnership,
- Trust,
- Co-Tenancy
Now, we effectively need the “deal” that goes behind the scenes to document the relationship. That agreement should cover financial contributions, time commitments, length and duration of the deal. How are the parties going to wind things up and will there be a buy/sell shotgun provision. That works OK, if both parties have money otherwise it’s a disaster.
With a partnership, we will have one set of financial statements. If a joint venture is use then, there is the option for two.
Naturally, there are lots of issues to be identified and discussed. Once the parties have a general idea, they should each write things down on a piece of paper and then meet with a lawyer who will make the appropriate recommendations and draft the “deal”etc.
Both parties should have independent legal representation.
Brian Madigan LL.B., Broker