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5 responses to “Industry Links

  1. I would like to know whether you welcome contribution of articles related to construction industry in Malaysia. I am writing on behalf of my Partners in the law firm specializing in construction works (www.beldenlex.com). We would like to share our expertise particularly on legal issues pertaining to construction industry in the form of contribution of articles. What are other conditions besides the one that you have stipulated under your terms of terms in your website?

    FYI, I am a library consultant for the Firm. I would be very happy if I could offer any assistance to enrich our resources on construction industry for the Malaysian public. Looking forward to hearing from you.

    • Dear Shaikih

      Thank you for your communication. The site was set up to provide a free resource to those in the construction industry in respect of contract administration and contract law as it is an area which does not receive so much attention at the moment and we considered there to be a vacuum and lack of information. We would welcome any articles which are related to the site topic area especially construction and contract law relating specifically to Malaysia. All articles on the site would be credited to the author of the article and links would be provided to the authors website. The article must be by the author that is the only requirement but it would be nice if you could return the complement by placing a link to Malaysian Construction and Contract Law on your own site. At present the site is hosted on WordPress in the coming months we hope to host the site on an alternative host provider, the site was only started recently and we have generated a slow growing interest in Malaysia and the region which we hope will continue. Should you wish to discuss further your proposal in regard to articles please do not hesitate to email malconlaw@ymail.com

  2. i would like to learn how to construct a commecial proposal paper/agreement in the situation of a developer would like to develop / JV with land owner

    • Dear Mohd,

      It is assumed from your question that you are a landowner looking for guidance on the drafting of an agreement between a landowner and a developer where the landowner is committing their land and the developer is committing to develop the site for commercial use. Obviously it would depend greatly on the laws applicable in the jurisdiction of the development, land and commercial law would be extremely important and the drafting of such a document should be undertaken by a competent legal advisor. At the end of the day the land owner if committing the land to the deal must be satisfied as to the developers commercial standing and proof of capital and agreement on funding of development costs would be extremely important. The reason a developer would choose to JV rather than buy the land may be varied but obviously the advantage is reduced early expenditure in the way of land acquisition cost. The land owner however may need to be prepared to wait a considerable time before being able to generate returns. Consider this: If land is commercially attractive for development sale of the land would generate an immediate return for land owner and would attract developers to purchase. If land is not commercially viable land owner may consider that development of the land will make it more attractive to future investors and use development to enhance surrounding land value, however this is not guaranteed. So you must understand the reasons for forming a JV. Most JV’s of this nature are formed either to reduce capital requirements and pool resources (land and development know-how) but if the sole reason is to attempt to develop a parcel of land which the owner considers will generate more income in a developed condition than by land value alone the owner must appreciate the risks involved in development and not think that putting the land as his sole contribution or buy into the JV will be the end of it. If land owner is minor partner in JV his risk will increase once land is owned by JV, it could be used a collateral for the development cost and be lost, it could be mortgaged to raise cash, many many things and if banks are providing the finance for the development someway the land will be at risk if development or JV partner fail. In addition if development costs escalate and how does the JV agreement account for this. What if one partner wishes to increase capital in JV can landowner inject more cash or will he see his participation in the JV reduced or even default and find himself excluded from the final profit which could be years from commencement of the development. Thus before considering a JV to develop land it is essential that the land be valued to determine its true value, the development costs are accurately calculated, the parties financial limits are agreed and mechanism in agreement in case of default. it is normal that all schemes start on a positive but always be prepared for the challenges ahead. (property slump, financial crisis, revisions to lending rules, political risks, changes in taxation which does not even touch the construction risks.

      As mentioned above it is essential you seek legal advise and know what you are prepare invest and what returns are realistic. In addition to the development cost remember there will be considerable legal and other costs which you will have to allow for and budget for if you entrust all to the other partners of the JV you may well regret and find yourself at a disadvantage later.

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