A joint venture, sometimes referred to as a joint
adventure, is an undertaking founded on contract by two or more persons jointly
to carry out a single business enterprise for profit. The undertaking or
enterprise usually relates to a single transaction even though it may comprehend
a business to be continued for a period of years. The relationship among joint
venturers or joint adventurers does not create a partnership per se, although
courts have shown the tendency to ascribe partnership law to joint ventures.
Because both joint ventures and partnerships are associations with very similar
characteristics, it can be extremely difficult to distinguish between them.
In Texas, a joint venture is considered to be a
Title Insurance Considerations
Whenever a joint venture is found in a chain of title, or the joint venture is to become the subject of title insurance, it is necessary to determine the legal status and capacity of the joint venture to acquire, hold, encumber, and convey real property.
In this respect, the most important points to be determined are the following:
- Whether when qualifying either as a partnership, title to real property can be held in the name of the joint venture or in the names of its partners.
- Whether the Company has been furnished with a duly executed copy of the joint venture or contract.
- Whether it has been ascertained that the joint venture agreement remains in full force and effect and that all the joint venturers remain either alive or in good standing (if corporate).
Liens Affecting The Members of A Joint Venture
Unless the joint venture agreement is sufficient to
qualify the association as a partnership under relevant state law and unless the
deed vests title in the joint venture, judgments, tax liens, pending suits, and
other matters affecting any of the joint ventures must be considered as
affecting the joint venture property and must be shown as exceptions in title
commitments and policies.