Legal Question in Construction Law in Texas

Partnership Agreement to Construct Property

I am in the process of obtaining credit to acquire land and construct property in Texas. My assets are being used to qualify me for the loan, hence ALL of the financial risk is mine since I will be the only one signing the loan documents (ie. assuming the debt). The total loan amount is expected to be approx. US$1.8 million

My partner (whose idea it was to build these types of properties in this particular location) has offered to provide the ''sweat equity'' meaning he will be the ''construction/project manager'' to ensure the structures are successfully built. He will work for a percentage of the sales profits and/or rents. He bears no financial risk since he is not co-signing for the construction loan.

Considering I bear 100% of the financial risk in case something goes wrong, how can I structure an agreement between us to ensure my interests/rights are protected and to aviod future litigation involving '' it was my idea!; well it's my money!''

thanks in advance


Asked on 4/18/07, 12:57 pm

2 Answers from Attorneys
Peter Bradie Bradie, Bradie & Bradie

Re: Partnership Agreement to Construct Property

Speak with an attorney as to the best business structure to accomplish your desired ends. A partnership is risky.

We've handled a number of similar situations.

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Answered on 4/18/07, 1:11 pm
Johm Smith tom's

Re: Partnership Agreement to Construct Property

Mr. Bradie is correct. Your capital investment is much more important than your partner's sweat. I would propose first that you own the company and employ the other person. If that isn't workable, then you can offer minor ownership in your company but retain decision making authority for all major issues or just take your money and get an employee that will sweat for you.

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Answered on 4/18/07, 4:46 pm


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