A forward funding agreement (FFA) is a contract between a developer and an investor, whereby the investor agrees to fund the development of a property before it is completed. In return, the developer agrees to deliver the finished property to the investor at a predetermined price and date. The FFA is often used in commercial real estate development projects, such as office buildings or shopping centers.
If you are a developer or investor looking to enter into an FFA, it is important to have a sample agreement that outlines the terms and conditions of the deal. This can help to ensure that both parties understand their obligations and protect against any potential disputes.
Here is a sample FFA agreement that covers some key components:
1. Parties involved: This section should identify the developer and investor, including their legal names and addresses.
2. Description of the property: This should include the location and a detailed description of the property, as well as any plans or permits related to the development.
3. Funding details: The agreement should outline the amount of funding to be provided by the investor, the timeline for disbursement, and any conditions or requirements for the release of funds.
4. Development schedule: The agreement should include a detailed timeline for the completion of the project, including milestones and deadlines for specific stages of development.
5. Obligations of the developer: This section should outline the developer`s responsibilities, such as obtaining permits and licenses, overseeing construction, and delivering the completed property to the investor.
6. Obligations of the investor: The agreement should also define the investor`s responsibilities, such as providing funding according to the agreed schedule and making any required payments.
7. Termination and default: The agreement should include provisions for termination or default, such as when the investor can withdraw from the agreement or when the developer can be deemed in default.
8. Dispute resolution: Finally, the agreement should outline a process for resolving any disputes that may arise between the parties.
While this sample agreement is a good starting point, it is important to remember that each FFA will have unique terms and conditions based on the specific project and parties involved. It is recommended that you consult with legal and financial professionals before entering into any forward funding agreement.