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Banana Town, Kiambu

K-Unity Building, 1st Fl.

0789661027, 0753823591


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Merino Real Estate Joint Ventures

Merino Joint Venture product occurs between Merino and one or more parties, in working together through compiling of resources in order to come up with a Project. Both parties bring something unique to the project in order to achieve an objective. For example both parties can provide equal resources for example party A can provide land plus money equivalent to party B contribution that will be used to set up the project. The shares are divided in terms of the percentage that each party contributes. The two companies can then come up with an agreement whereby both parties benefit. (DRAFT Joint Venture AGREEMENT).In other scenarios one party can have land and zero resources for development projects and party B has resources but no land for development. The two parties can then find a middle ground and come up with a project that favors both of them. It’s a deal between the land owner and the developer and thus it’s  a symbiotic alliance.

Advantages of this joint venture is  increase in capital base, sharing of risks and free marketing channels and especially for the land owner because the developer is a real estate agency and thus it’s their mandate to advertise and market the product.

We ensure we have an existing and functioning Joint Venture policy before taking new clients on board so to minimize room for error and seal loopholes. For us to have a beneficial Joint Ventures, we ensure we are formed on equal partnership in that both parties contribute on a 50-50 basis. This is in that the land value should equal to the amount that the developer is expected to contribute to the project. A special purpose vehicle in the form of a limited liability company is formed.

Secondly a special committee is formed to oversee the project, this includes people from both parties, and a chairperson for the committee is appointed and remains neutral. The real estate agency oversees the project since they are the developers and hence have resources relevant to the venture. The real estate should get returns of 15% or even more. Sharing of profits is equivalent to the shares of each party. The developer is first paid 15% and after that the remaining amount is shared between the two parties.

It can either be contractual or corporate. In contractual the two parties work together and document their working relationship while in corporate they form a corporate entity which can be in form of a company or a limited liability partnership in order to pursue a common interest. Parties prefer corporate because the land can be held in a special purpose vehicle where the partners are also shareholders. Risks and losses are shared equally while profits are shared depending on the contribution of each party.

Drawbacks facing joint ventures include misalignment of purposes.The agreement should address decision making, mode of reporting, disclosure requirement and ensure transparency at all times.The lifetime of the joint venture can be lifelong or can be stipulated by the amount of time that the two venturers agreed upon.

Upon completion of the agreed time party A in agreement with the other venturer can either agree to buy out or sell out. The parties can choose to sell out if the venture is no longer productive in terms of profit as when it started, secondly they can choose to buy the whole land if the accrued benefits are constantly increasing or renew the joint venture contract

Joint ventures have vast sources of Finances. This can be done through borrowing from financial institutions such as banks or from other accredited money lending agencies, investments from the agencies, directors’ investments, and deposits from rent income and also from other investors.


  • Planning; the scope of the Joint Venture, The purpose
  • Form of Joint V- The kind of ownership.
  • Regulatory- identifying current and anticipated changes, mode of operation and exit strategy
  • Implication of JV on existing operations and reporting requirements- financial, management
  • Tax considerations
  • Internal preparations
  • Confidentiality agreement
  • Letter of intent- it can be binding or non binding
  • Asses your needs-
  • Focus on finding a good fit


  1. Introduction section- name of parties entering into the agreement, specific objectives and responsibilities
  2. Provide important definitions – agreed terms provide clarity to your document
  3. State the business objectives of the joint venture- provisions provide the scope and purpose of the agreement hence help both parties in understanding the expectations
  4. Explain the joint venture governance structure- governing body and management
  5. Lay out what each party will contribute- something of value from both parties will lead to a binding agreement. This can be through carrying out a SWOT analysis of each party.
  6. Determine how profits, losses and liabilities will be shared- mayor not be shared equally
  7. Create dispute resolution provisions
  8. Draft exit and termination procedures


In the Joint Venture, obligations and rights of each party are outlined and especially those that involve:

  • Capital
  • Contractual returns of the Joint Venture
  • Management structure
  • Contributions of each party
  • Sharing of profits which depend on the contributions of each party
  • Decision making process
  • Terms of operation
  • Partnership structure


  • Land acquisition
  • Project appraisal
  • Concept development
  • Commencement of project
  • Exit of Joint Venture
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