When you’re part of a real estate jv as either the expert or the money investor; and you own X% of the property without being on title, there are very straightforward ways to protect yourself.
1. The first way is to have a proper joint venture agreement preferably prepared, or at least reviewed by a lawyer representing you.
This is to make sure your interests are very clear-cut in a contract.
By the way, it makes total sense to have this real estate jv agreement benefit ALL parties the same way doesn’t it?
The next thing I would do is have it notarized by all parties.
2. Register the real estate jv agreement against title.
Now a lot of people get confused with this.
Because having the agreement registered against title is not the same as an individual GOING on title.
You’re not all of a sudden “on title”.
You’ve registered this real estate jv contract AGAINST title just like somebody would register a lien against title of a property.
And what it means is, title is no longer clear – there’s something registered against the title… in this particular case it would be the real estate jv agreement.
Why Registering the Real Estate JV Agreement Against Title Works
When you have your real estate jv agreement registered against title, it means the property cannot be sold and cannot be refinanced without that JV agreement being dealt with.
In other words let’s say I’m in a deal with someone who is on mortgage and title and our real estate jv agreement is not registered against title.
All of a sudden three months (three years, five years, doesn’t matter) later they decide they will sell the property, keep all the cash and NOT tell me about it…how am I protected against that?
Well if I’ve registered the joint venture agreement against title, they can’t sell the property without me knowing.
The property can’t even be refinanced without me removing that notice to title – which is making sure I’m getting my fair share.
Cool right?
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3. Other people have gone a step further and registered a mortgage against title if it was a firm dollar value associated with it…however, it’s the same kind of impact.
So there you go – simple steps to protect your interest in a real estate jv deal without getting into a huge legal battle or anything like that.