N IMPORTANT consideration in forming any real estate joint venture is the ability of the joint venture partners[1]� to exit their respective investments. The identity of the joint venture participants and what each contributes to the joint venture are critical to its success. As a result, many joint venture agreements limit or prohibit transfers of interests by partners, and where transfers are permitted, a non-exiting partner will often seek to control the identity of any new co-venturer, particularly in a situation where the exiting partner has any consent or veto rights over management decisions.
Even with free transferability of interests, the potential difficulty of locating a transferee who will be willing to live within an existing joint venture structure complicates a partner’s ability to exit a joint venture (or may, at the very least, result in a discounted price for the joint venture interest). While the unilateral ability to cause a sale of the property will eliminate this complication, joint venture agreements commonly place restrictions on the ability of one partner to cause a sale of the assets of the joint venture.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
