A contribution with a veto is a parcel the platform does not control.

A landowner contributes a parcel to a platform and receives units: the parcel's value, supported by the valuer, becomes the landowner's commitment, the landowner becomes a holder, and the parcel becomes the platform's. That is the contribution, and it works because the platform controls what it holds. The landowner, who knows the parcel and cares about it, often asks for more than units: a say in what is built, a voice on the design, and, in the draft that arrives from the landowner's counsel, a consent over the parcel's use, its programme or its sale. A right to be consulted is a say. A consent is a veto, and an owner with a veto over a contributed parcel can stop the platform from doing with that parcel what the exposure statement requires, which the platform's other holders subscribed to. A contribution with a veto is a joint venture between the landowner and the platform over that parcel, drafted as though it were a contribution, and it is found at the first design change, when the owner discovers it can stop the scheme, or at exit, when the acquirer discovers the platform cannot sell.

This note sets out what a contribution is and why it works, the difference between a say and a consent, the consents a landowner asks for and what each stops, what the consent does during the programme and at exit, the contribution class and its terms, the seat and the consultation right, the joint venture as the honest alternative and its control matrix, the buy-out formula, the valuation of a parcel with a veto, the other holders' reading, the developer's reading, the lender's reading, the onshore interface, a comparison, a worked contribution as a type, cases, what each party holds, the sequence, questions, terms and what to read.

What a contribution is

A contribution is a subscription in kind: the landowner transfers the parcel to the platform's onshore vehicle and receives units in the platform at the parcel's value. The landowner's commitment is the parcel's value; its units rank with the other holders' units, or in a contribution class with its own terms; its liquidity is the platform's exit; and its exposure is to the holding, not to its own parcel. The platform receives a parcel without cash, at a value the valuer supports, from an owner whose willingness to contribute rather than sell is the land door's access. The contribution works because the parcel, once in, is the platform's to develop, finance and sell under the exposure statement, and the landowner's interest in it is through its units like everybody else's.

A say and a consent

A say is a right to be heard: a seat on the committee, a right to receive the programme, a consultation on the design, a right to comment before a decision. The platform decides after hearing, and the owner's remedy if it disagrees is its voice on the committee and its units' vote with the others. A consent is a right to approve: no change of use, no change of programme, no disposal, no financing, without the owner's agreement. The platform cannot decide without the owner, and the owner's remedy if it disagrees is to refuse. A say costs the platform a seat and a meeting; a consent costs the platform control of the parcel. The landowner's counsel drafts the second and calls it the first, and the platform's counsel reads the verb.

The consents asked for

Use: the owner wants the parcel used for what it was contributed for, residential and not logistics, or the family's intended scheme and not another. Programme: the owner wants the development to happen, on a timetable, and not to be held. Design: the owner wants the scheme to look a certain way, or to preserve something. Disposal: the owner does not want the parcel sold to a person it dislikes, or sold at all before the scheme is built, or sold separately from the holding. Financing: the owner does not want its parcel charged to a lender. Each is understandable from a person who owned the parcel, and each, as a consent, stops the platform from doing the thing without the owner: changing the use when the market changes, rephasing the programme when the financing does, adjusting the design when the authority requires, selling when the statement's exit period arrives, or borrowing to build.

Why the owner asks

The owner asks for a consent because the parcel was its own and the units are somebody else's promise. It has seen schemes change, developers fail and buyers it did not choose, and it does not yet trust the platform with the thing it knew. The consent is the owner's way of keeping the parcel while giving it, and the platform's answer is not refusal but substitution: the things the owner fears are answered by undertakings the platform gives, by the exposure statement the owner can read, by the class's terms, by the seat and the consultation, and by a relationship conducted so that the owner's comments are heard and answered. An owner whose comments were answered at the first change is an owner who does not regret the consent it did not get; one whose comments were ignored is an owner who will ask for the consent at the next contribution, and tell the market why.

The undertaking as the substitute

An undertaking binds the platform to do or not do a thing, and the owner enforces it as a contract without holding a consent over the platform's decisions. An undertaking to use the parcel within the statement's typologies, to commence the programme within a period, to offer the owner's family a right of first refusal on a disposal at the price a third party offers, to keep the owner informed, is each an obligation the platform controls the performance of and the owner can enforce if it is breached. The undertaking answers the owner's fear without giving the owner the decision, and the platform's counsel offers undertakings where the owner's counsel asked for consents.

During the programme

The first design change arrives with the planning authority's conditions or the developer's costing, and the owner, consulted, disagrees. With a say, the platform hears and decides. With a consent, the platform waits, negotiates, pays, or does not change, and the programme is the owner's. The financing arrives and the lender wants a charge over the parcel; the owner's consent over financing is the lender's condition precedent, and the owner prices it. The market changes and the use should change; the owner's consent over use is the market's veto. Each event is ordinary, and each is a negotiation with the owner under a consent the platform granted to obtain the parcel.

At exit

A holding sold whole is priced by an acquirer who reads every parcel's consents, and a parcel the platform cannot be sure of selling is a parcel the acquirer prices at a discount or excludes from the sale. A parcel-by-parcel exit stalls at the contributed parcel when the owner withholds consent to the disposal, and the platform's term ends with the parcel still in it. A distribution in kind returns the parcel to a register that includes the owner, on the owner's terms. The exit the exposure statement promised the other holders is, for that parcel, the owner's to grant, and the owner grants it for a price or not at all.

The contribution class

The contribution class is the structure that gives the landowner what it can properly have: units in a class with its own lock-up, so the owner cannot transfer its units before a date; its own distribution position, so the owner's units participate as the class's terms say, which may be pro rata with the others or with a preference the valuer's figure justified; and its own reporting on the contributed parcel, so the owner sees what became of what it gave. The class's terms are economic and informational, and they are in the constitution, where every other holder reads them. What the class does not carry is control, because control over one parcel is not a term of units.

The seat and the consultation right

The landowner's seat on the committee gives it a voice on the matters the committee decides, with the conflict rules applying when the matter is its parcel. The consultation right, written into the development agreement as a consultation, gives it the design and the programme before decisions are made, a period to comment, and an obligation on the platform and the developer to consider the comments and to respond. The right is drafted so that the platform's decision after consultation is the platform's and is final, and the owner's remedy is the committee. A consultation right with a deemed refusal if the owner does not respond is a consent; one with a deemed approval is a consultation; and the drafting is the difference.

The joint venture as the honest alternative

Where the owner insists on a consent over its parcel, the structure is not a contribution and the platform does not draft it as one. It is a joint venture between the owner and the platform over that parcel: a company holding the parcel with the owner and the platform as shareholders, a control matrix saying who decides what, reserved matters for the owner listed, the platform's control of everything else, a programme both have agreed, a financing both have agreed, and a buy-out formula for the day the two disagree. The joint venture is a lawful and ordinary structure, used with developers in the developer room, and it tells the truth about the parcel: it is controlled jointly. The platform holds its share of the joint venture as an asset under the exposure statement, at the weight and with the exit the statement permits for jointly controlled parcels, and the other holders read it as what it is.

The control matrix

The matrix lists every decision about the parcel, who takes it, and what the other party's right is: the platform decides, the owner is consulted; the platform decides, the owner may object to the committee; the owner consents; both consent; deadlock goes to the buy-out. The reserved matters for the owner are few and named, such as a change of use outside the agreed scheme or a sale below a floor, and everything else is the platform's. A matrix that reserves the programme, the design and the disposal to the owner's consent is a matrix in which the owner controls the parcel, and the platform's share of the joint venture is valued as a minority interest in someone else's land.

The buy-out formula

The formula resolves the deadlock: one party may require the other to buy or sell its share at a price the formula fixes, by reference to the valuer's figure with a discount or premium the formula states, within a period, with the financing released or assumed. The formula is drafted at the joint venture's formation, when neither party knows which side of a future deadlock it will be on, and it is the joint venture's exit when the two disagree. A joint venture without it is a deadlock without a door, and a contribution with a veto is a joint venture without a formula, which is the worst of both.

The valuation of a parcel with a veto

The valuer values a parcel the platform controls at its value under the programme; it values a parcel subject to an owner's consent over use, programme or disposal at a discount for the control the platform does not have, and the discount is the veto's price made visible in the net asset value. A committee that reads the valuer's basis reads the discount and asks what the consent cost. A platform whose net asset value carries the parcel at full value despite the consent has a net asset value the valuer did not sign on that basis, or a valuer who was not told.

The other holders' reading

The other holders subscribed to the exposure statement, with its exit routes and its programme, and a parcel subject to an owner's veto is a parcel the statement's routes do not reach without the owner. The other holders read the contribution's terms in the constitution, where the class is, and in the contribution agreement, which the committee approved, and a consent buried in the contribution agreement's consultation clause is a term the other holders did not see and the committee did not read as one. The committee's reading of each contribution agreement for the verb is the other holders' protection.

The developer's reading

A developer appointed to build on a contributed parcel reads the owner's rights for what can stop the programme. A say is a meeting; a consent is a condition precedent to every design change and every phase. The developer's agreement is drafted to the owner's rights, and a developer that discovers the owner's consent at the first change discovers that its programme has a third party with a veto and its costs have no protection against the delay. The developer's counsel reads the contribution agreement with the platform's.

The lender's reading

A lender to the parcel's development wants a charge over the parcel and the power to enforce it, and an owner's consent over financing or disposal is a condition the lender requires satisfied in advance or a security it will not take. A lender that discovers the consent at the facility's conditions precedent prices the owner's agreement, or declines the parcel from its security, and the platform finances the parcel from equity or not at all.

The onshore interface

The contribution is a transfer of the parcel onshore, with the state's transfer charge, the foreign ownership approval for the platform's vehicle and the registry's record, and the owner's consents, if granted, are in the contribution agreement or the joint venture's constitution and not on the registry. An owner's consent over disposal that the registry does not record is a promise the platform made, and a purchaser of the parcel who does not know of it takes free of it while the platform answers to the owner. The onshore company's constitution, where the joint venture is the structure, carries the reserved matters in a form the state's companies law recognises, and counsel in the state says what the companies law allows a minority shareholder to reserve.

By right · by structure	In a contribution	In a joint venture	What it stops
Seat on the committee	Yes, with the conflict rules	Not relevant; a board seat instead	Nothing
Consultation on design and programme	Yes, with deemed approval	Yes, or a reserved matter	Nothing, or the reserved matter
Consent over use	No	A reserved matter, narrowly named	The market's change of use
Consent over programme	No	Rarely; the programme is agreed at formation	Rephasing
Consent over disposal	No	A floor price, or a reserved matter	The exit
Consent over financing	No	Agreed financing at formation	The lender's charge
Deadlock resolution	Not needed	The buy-out formula	The joint venture's end
Valuation	Full value under the programme	A share, at the control's discount

A contribution, as a type

A landowner agrees to contribute a masterplanned parcel to a platform at the valuer's figure, and its counsel's draft contribution agreement carries a clause requiring the owner's approval of the scheme's design, any change to it, and any disposal of the parcel before completion of the scheme. The platform's counsel reads the verb and returns the draft: a contribution class with a three-year lock-up and pro rata distribution; a seat on the committee with the conflict rules; a consultation right on design and programme, with a fourteen-day comment period, an obligation to consider and respond, and the platform's decision final; and no consent. The landowner's counsel asks for a consent over use outside residential, and the platform offers, instead, an undertaking in the contribution agreement to use the parcel within the exposure statement's typologies, which binds the platform to the statement the owner can read. The landowner accepts. In year two the planning authority requires a design change; the owner is consulted, objects, is answered, and the platform decides. In year five the parcel is charged to a lender without the owner's consent being needed. In year seven the holding is sold whole, the parcel included, and the owner's units receive the holding's price.

The structure paper's page

The structure paper carries a page on contributions: the class's terms, the seat, the consultation right's drafting, the undertakings the platform will offer, the list of consents it will not grant, the joint venture's matrix and formula as the alternative, the valuer's instruction for contributed parcels, and the committee's reading. The page is written before the first landowner conversation so that the platform's answer to the first draft is ready, and it is the page the landowner's counsel is shown when the platform explains what it offers instead.

Four cases, as types

A platform accepts a contribution agreement whose consultation clause provides that the owner's silence is a refusal. The first design change is refused by silence, the developer stops, and the platform learns it has a joint venture with no control matrix and no buy-out.

A platform grants the owner a consent over disposal to obtain the parcel. At exit the acquirer of the holding excludes the parcel from its offer, the platform's term ends with the parcel in it, and the owner offers to consent for a share of the price.

A platform grants a consent over financing. The lender requires the owner's agreement as a condition precedent, the owner agrees for a payment, and the parcel's development is financed at a cost the other holders bear.

A platform drafts the contribution with a class, a seat and a consultation right, and where the owner insists on control, drafts a joint venture with a matrix and a formula and holds its share as what it is. Every parcel in the holding is one the platform controls or one the statement shows as jointly held.

What each party holds

The landowner holds its units, its class's terms, its seat and its consultation right; or its share of the joint venture, its reserved matters and the formula.

The platform holds control of the contributed parcel; or its share of the joint venture under the matrix.

Counsel holds the verb in every clause and the joint venture's documents where the structure is one.

The committee holds the approval of each contribution agreement read for consents.

The valuer holds the basis: full value, or the discount for control not held.

The developer and the lender hold their readings of what can stop them.

Where it surfaces

It surfaces at the owner's counsel's first draft, in the consultation clause's verb. It surfaces at the committee's approval, when the agreement is read as a contribution and approved as one. It surfaces at the first design change, when the owner refuses. It surfaces at the lender's conditions precedent. It surfaces at the valuer's report, when the basis is full value for a parcel with a consent the valuer was not told of. It surfaces at the exit, when the acquirer excludes the parcel. And it surfaces at the next contribution in the market, when the owner who got a consent tells the next owner to ask for one.

The cost of getting it wrong

A contribution with a veto costs the platform control of a parcel it carries at full value, the programme's delays at each change, the lender's price for the owner's consent, the acquirer's exclusion or discount at exit, and the other holders' claim that the statement's exit was given away for one parcel. The cost of the structure that holds is a class, a seat and a consultation right, which cost the platform a meeting, and where the owner insists, a joint venture, which costs a matrix and a formula and tells the truth.

The committee's reading

The committee reads each contribution agreement before approval for every clause in which the owner's agreement is required, and asks of each whether it is a say or a consent. It reads the class's terms against the other holders' units. It reads the valuer's basis for the rights it reflects. And where the structure is a joint venture, it reads the matrix for what the platform controls and the formula for the way out. The owner's representative, if the owner already sits on the committee, abstains, and the minute records the reading.

A timeline, as a type

At design the statement's contribution terms are written. In year one a landowner agrees terms in principle under non-disclosure; the owner's counsel's draft carries consents over design, programme and disposal; the platform's counsel returns a class, a seat, a consultation with deemed approval, and undertakings on use and commencement; the owner accepts. The committee reads the agreement for the verb and approves. The parcel transfers onshore with the state's charge and the approval, and the owner's units are issued in the class. In year two the authority's design change is consulted on, objected to, answered and made. In year four the parcel is charged to a lender. In year six the owner's lock-up ends and it holds. In year eight the holding is sold whole and the owner's units receive the price. In the same year a second landowner in the same market, having watched, contributes on the same terms.

The sequence

1. The exposure statement's contribution terms are written: the class, the lock-up, the distribution position, the seat, the consultation right, and no consent.
2. Each contribution agreement is drafted from them and read by counsel for the verb in every clause.
3. Where the owner insists on control, the structure is redrawn as a joint venture with a control matrix and a buy-out formula, and held under the statement as jointly controlled.
4. The committee approves each contribution agreement having read it for consents, with the owner's representative abstaining.
5. The valuer is told the rights and values on them.
6. The developer's and the lender's agreements are drafted to the rights the owner holds.

Questions a manager asks

Can the owner have a consent over one thing. A narrow reserved matter in a joint venture, named; in a contribution, no, because units do not carry control of an asset.

What if the owner's reason is the family's intention for the parcel. An undertaking by the platform to use the parcel within the statement's typologies, which the owner can read and enforce as an undertaking, without a consent over each decision.

Does the contribution class need a preference. Only if the valuer's figure and the negotiation justify it; a preference is an economic term the other holders read.

How is a consultation drafted as a consultation. A period, an obligation to consider and respond, deemed approval on silence, and the platform's decision final.

What does the valuer need. The rights the owner holds, in the agreement; a valuer told of a seat values one thing, and told of a consent values another.

Is a joint venture worse for the platform. It is honest about the control, valued accordingly, and exited by the formula; a contribution with a veto is the same control without the formula.

Terms used

Contribution: a subscription in kind, the parcel for units at the valuer's figure.

Say and consent: a right to be heard, and a right to approve; the second is a veto.

Contribution class: units with their own lock-up, distribution position and reporting, without control.

Consultation right: the owner's right to comment before a decision, with the platform's decision final.

Control matrix: the joint venture's list of decisions, deciders and the other party's rights.

Buy-out formula: the joint venture's deadlock resolution, a price by formula within a period.

What to read

The exposure statement's contribution terms; each contribution agreement, read for the verb; the constitution's contribution class; the joint venture documents where the structure is one; the valuer's basis for contributed parcels; the developer's and the lender's agreements. On this site, the portfolio, developer and worked rooms under Land.