A joint venture (JV) in building construction is a strategic partnership between two or more companies that agree to work together on a specific construction project. The partners share resources, risks, profits, and responsibilities.

Companies form JVs to pool resources, share risks, enter new markets, and tackle larger projects that might be too complex or expensive for a single company to manage alone. It allows them to combine expertise, equipment, and labor for better project outcomes.

The two main types of JVs in construction are:

• Equity JV: Partners form a new entity where each contributes capital and shares ownership.
• Contractual JV: Partners collaborate on a specific project without creating a new legal entity, usually governed by a contract.

A JV agreement should include:

• Scope of the project: Detailed description of the construction project.
• Roles and responsibilities: Clear allocation of duties among the partners.
• Financial arrangements: How profits, losses, and costs will be shared.
• Management structure: How decisions will be made and by whom.
• Dispute resolution: Procedures for handling disagreements.
• Duration: The timeline for the joint venture and project completion.

Decision-making in a JV is typically outlined in the joint venture agreement. Some JVs operate with equal input from all partners, while others may designate a lead partner to make final decisions. The structure depends on the partners’ agreement.