Corporate lawyer for real estate: corporate structure and transactions

Real estate companies face a dual legal complexity: that inherent in property law (contracts, planning, commonhold) and that of corporate law (corporate structure, shareholder relations, corporate transactions, financing). Many developers and asset-holding groups operate with ad hoc corporate structures designed for each project without a solid shareholder agreement, without exit mechanisms, and without clear governance. When a shareholder dispute arises or a project fails, the consequences are far more serious and costly than they would have been with correct structuring from the outset.

Since 2010 · 16 years Tax agent AEAT

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Why BM Consulting

Specialised advice and personal service

At BMC we advise real estate developers, real estate investment funds, family offices with property portfolios, and project-specific joint ventures across the full corporate dimension of their activity: from incorporating the project vehicle through to resolving shareholder disputes, including legal due diligence before acquisition and negotiating financing agreements.

  • Real estate SPVs isolate project risk and structure investor-developer relationships — the shareholders' agreement must define governance, waterfall distributions, additional capital call obligations, and exit mechanisms from day one.

  • Legal due diligence on a real estate asset must cover registered encumbrances at the Land Registry, planning classification, subsisting lease agreements, community debts, and any pending litigation — each can reduce value or block the transaction.

  • Plusvalia municipal tax (IIVTNU) applies to asset sales but not share deals — large real estate transactions are commonly structured as share purchases to avoid both ITP and IIVTNU (post-STC 182/2021 revised calculation).

  • The waterfall structure in a real estate JV determines the developer's upside and the investor's downside protection — hurdle rates of 8–10% with a 70/30 split above the hurdle are common market terms in Spanish residential development.

How we work

From first contact to case completion

  1. Project legal structuring

    We design the most appropriate corporate vehicle for each real estate project: SPV, joint venture, economic interest grouping, or investment fund. We draft the shareholder agreement with governance mechanisms, profit distribution, additional capital contributions, and exit provisions.

  2. Real estate legal due diligence

    We review the legal status of the asset: registered encumbrances, planning position, subsisting contracts (leases, purchase options, easements), pending litigation, permits, and licences. We deliver a risk report with mitigation proposals.

  3. Transaction contracts

    We draft and negotiate the contracts specific to the real estate transaction: sale and purchase, option to purchase, deposit agreement, joint venture agreement, construction and development contracts, financing agreements, and guarantees.

  4. Shareholder dispute resolution

    When a dispute arises between shareholders of a real estate company — governance deadlock, disagreement over asset disposal, failure to make agreed contributions — we advise on available options and represent you before the Commercial Court if necessary.

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The problem

Real estate companies face a dual legal complexity: that inherent in property law (contracts, planning, commonhold) and that of corporate law (corporate structure, shareholder relations, corporate transactions, financing). Many developers and asset-holding groups operate with ad hoc corporate structures designed for each project without a solid shareholder agreement, without exit mechanisms, and without clear governance. When a shareholder dispute arises or a project fails, the consequences are far more serious and costly than they would have been with correct structuring from the outset.

Our solution

At BMC we advise real estate developers, real estate investment funds, family offices with property portfolios, and project-specific joint ventures across the full corporate dimension of their activity: from incorporating the project vehicle through to resolving shareholder disputes, including legal due diligence before acquisition and negotiating financing agreements.

Process

How we do it

1

Project legal structuring

We design the most appropriate corporate vehicle for each real estate project: SPV, joint venture, economic interest grouping, or investment fund. We draft the shareholder agreement with governance mechanisms, profit distribution, additional capital contributions, and exit provisions.

2

Real estate legal due diligence

We review the legal status of the asset: registered encumbrances, planning position, subsisting contracts (leases, purchase options, easements), pending litigation, permits, and licences. We deliver a risk report with mitigation proposals.

3

Transaction contracts

We draft and negotiate the contracts specific to the real estate transaction: sale and purchase, option to purchase, deposit agreement, joint venture agreement, construction and development contracts, financing agreements, and guarantees.

4

Shareholder dispute resolution

When a dispute arises between shareholders of a real estate company — governance deadlock, disagreement over asset disposal, failure to make agreed contributions — we advise on available options and represent you before the Commercial Court if necessary.

Corporate law in real estate: the overlooked dimension

When legal advisory in the real estate sector is discussed, the focus is usually on sale and purchase contracts, planning licences, and leases. But there is an equally critical corporate dimension that frequently goes unaddressed: the corporate structure of projects, shareholder agreements, governance of joint ventures, and management of shareholder disputes when a project does not go to plan.

At BMC we cover this corporate dimension for companies and funds operating in the real estate sector. Our corporate law team knows both company law and the specific characteristics of the real estate sector: the structure of development projects, the operation of real estate investment funds, financing mechanisms, and divestment structures.

SPVs and real estate investment vehicles

Most real estate projects of any scale are structured through a special purpose vehicle incorporated specifically for that project. This structure isolates the project risk from the shareholders’ personal assets and enables the relationship between the operating developer and the financial investor to be articulated in a clear and controlled manner.

We incorporate the SPVs, draft their articles of association adapted to the needs of the project, prepare the shareholder agreement governing the relationship between the participants, and accompany the shareholders throughout the life of the vehicle until its winding-up.

The legal due diligence carried out before acquiring a real estate asset is the first line of defence against hidden risks: undisclosed registered encumbrances, planning irregularities, leases with unfavourable conditions, pending litigation, or restricted use permits. A rigorous due diligence report enables the negotiation of representations and warranties in the sale and purchase agreement that transfer identified risks to the vendor.

We carry out legal due diligence on residential, commercial, industrial, and mixed-use assets, coordinating with technical and planning advisers where the situation requires it.

Shareholder disputes in real estate companies

Shareholder disputes in the real estate sector have particular characteristics: the valuation of the underlying asset is the central element of the dispute, and the timelines of a real estate project create urgencies that a shareholder conflict can block. A shareholder who prevents the disposal of an asset when the market is at its peak, or who blocks board decisions, can cause enormous financial damage in a short time.

We advise on managing these disputes through options ranging from negotiating an exit agreement to challenging corporate resolutions or applying for judicial dissolution on the grounds of a deadlock in the corporate governance bodies.

Contact our team of specialist real estate lawyers for an initial assessment of your position.

FAQ

Frequently asked questions

The shareholder agreement for a real estate special purpose vehicle must regulate: the governance of the company (majorities required for key decisions, composition of the board or management body), capital contributions and any additional contributions if the project requires them, distribution of returns (waterfall) between shareholders with different return priorities, exit mechanisms (pre-emption rights, drag-along, tag-along, options over shareholdings), and grounds for early termination of the project.
A real estate legal due diligence covers: review of title and chain of transfers at the Land Registry, verification of encumbrances (mortgages, attachments, easements, planning charges), analysis of the planning position (land classification, planning permissions, pending licences), review of subsisting contracts affecting the asset (leases, options, use licences), verification of management company minutes and community debts, and analysis of any pending litigation relating to the property.
The most common structure is to incorporate an SPV in the form of an SL in which the developer contributes project expertise and management, and the investor contributes capital. The shareholder agreement sets the equity percentages, the priority on return (the investor typically has preference until recovering the capital plus a minimum return), decisions reserved to the investor, and exit conditions. The structure may also include participating loans from the investor to the SPV to optimise the capital structure.
If there is a shareholder agreement, it will govern the procedure: typically a pre-emption right in favour of the remaining shareholders is activated, enabling them to purchase on the same terms offered to the third party. In the absence of an agreement, or if the agreement does not address the situation, the statutory rules for private limited companies apply: the articles of association determine the transfer regime, with a possible right of first refusal or management body approval. A well-drafted shareholder agreement from the outset prevents these deadlock situations.
A waterfall is the priority order in which returns from a real estate project are distributed between investors with different return profiles. A typical structure: first, the preferred investor recovers 100% of contributed capital; second, the preferred investor receives a preferred return (hurdle rate, typically 8–10%); third, remaining returns are split between the financial investor and the developer/operator in agreed proportions (often 70/30 or 80/20). The waterfall determines the incentive structure for the developer — if they do not clear the preferred investor's hurdle, they receive nothing. Negotiating the waterfall terms and ensuring they are correctly implemented in the shareholders' agreement is one of the most consequential aspects of structuring a real estate joint venture.
The plusvalia municipal (Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana, IIVTNU) is a local tax levied by the municipality on the increase in value of urban land since the last transfer. Following the Constitutional Court ruling of October 2021 (STC 182/2021), the old formulaic calculation was declared unconstitutional; municipalities now use a revised calculation based on either the coefficient method or actual gain comparison. By custom, the seller bears the plusvalia in a standard sale. In corporate transactions (share purchases rather than asset purchases), IIVTNU does not apply — which is one of the tax reasons why large real estate transactions in Spain are often structured as share deals rather than asset deals.

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Frequently asked questions

Questions about Corporate Lawyer for the Real Estate Sector

The shareholder agreement for a real estate special purpose vehicle must regulate: the governance of the company (majorities required for key decisions, composition of the board or management body), capital contributions and any additional contributions if the project requires them, distribution of returns (waterfall) between shareholders with different return priorities, exit mechanisms (pre-emption rights, drag-along, tag-along, options over shareholdings), and grounds for early termination of the project.
A real estate legal due diligence covers: review of title and chain of transfers at the Land Registry, verification of encumbrances (mortgages, attachments, easements, planning charges), analysis of the planning position (land classification, planning permissions, pending licences), review of subsisting contracts affecting the asset (leases, options, use licences), verification of management company minutes and community debts, and analysis of any pending litigation relating to the property.
The most common structure is to incorporate an SPV in the form of an SL in which the developer contributes project expertise and management, and the investor contributes capital. The shareholder agreement sets the equity percentages, the priority on return (the investor typically has preference until recovering the capital plus a minimum return), decisions reserved to the investor, and exit conditions. The structure may also include participating loans from the investor to the SPV to optimise the capital structure.
If there is a shareholder agreement, it will govern the procedure: typically a pre-emption right in favour of the remaining shareholders is activated, enabling them to purchase on the same terms offered to the third party. In the absence of an agreement, or if the agreement does not address the situation, the statutory rules for private limited companies apply: the articles of association determine the transfer regime, with a possible right of first refusal or management body approval. A well-drafted shareholder agreement from the outset prevents these deadlock situations.
A waterfall is the priority order in which returns from a real estate project are distributed between investors with different return profiles. A typical structure: first, the preferred investor recovers 100% of contributed capital; second, the preferred investor receives a preferred return (hurdle rate, typically 8–10%); third, remaining returns are split between the financial investor and the developer/operator in agreed proportions (often 70/30 or 80/20). The waterfall determines the incentive structure for the developer — if they do not clear the preferred investor's hurdle, they receive nothing. Negotiating the waterfall terms and ensuring they are correctly implemented in the shareholders' agreement is one of the most consequential aspects of structuring a real estate joint venture.
The plusvalia municipal (Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana, IIVTNU) is a local tax levied by the municipality on the increase in value of urban land since the last transfer. Following the Constitutional Court ruling of October 2021 (STC 182/2021), the old formulaic calculation was declared unconstitutional; municipalities now use a revised calculation based on either the coefficient method or actual gain comparison. By custom, the seller bears the plusvalia in a standard sale. In corporate transactions (share purchases rather than asset purchases), IIVTNU does not apply — which is one of the tax reasons why large real estate transactions in Spain are often structured as share deals rather than asset deals.

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