Joint Development Agreement Format

In India, real estate development has followed a path of partnership, where developers come together with landowners to combine land ownership with building expertise. The partnership is formalised by a Joint Development Agreement, which is the instrument that specifies the collaboration between the developer and the landowner. A JDA is a legal document that specifies the pre-agreed outcomes under the contract in consideration of bringing a project to completion. The JDA lays out the conditions under which a developer will undertake the construction of a project on the property of another, and the benefits that the parties involved will share.

A comprehensive JDA is a vital document because it states the roles of the parties, how revenue will be split, timelines for development, and protections related to conflict. For landowners, a JDA often creates an opportunity to monetise land without significant monetary investment. For developers, a JDA can mark the beginning of a new or extended opportunity to undertake a development or project without the need to purchase land.

This blog explains the typical components of a JDA format and provides a simple sample format for reference.

Comprehending a Joint Development Agreement

A Joint Development Agreement is a binding, legal contract that sets out the obligations and entitlements of the developer and landowner in a real estate project.  Ordinarily, the land will be contributed by the landowner while the developer is responsible for construction and the entire process of obtaining necessary approvals, financing, leasing or marketing the project. Given the capital outlay of the project and the long-term nature of the arrangements, the Joint Development Agreement should be detailed, clear and comply, where necessary, with relevant laws, such as RERA, local municipal laws, stamp duty law, and income tax provisions.

Key Features of a Typical Joint Development Agreement Format

1. Details of the Parties: Clear identification of the landowner(s) and developer(s) with complete addresses and identification documents.

2. Description of the Land: Accurate details of survey numbers, location, boundaries, extent and title status.

3. Development Rights: Terms defining the rights granted to the developer, including rights to obtain permissions, undertake construction and market the project.

4. Project Specifications: Details of the proposed project, construction obligations, quality standards, design approvals and estimated timelines.

5. Revenue-Sharing or Area-Sharing Arrangement: The agreed ratio of units, built-up area or monetary consideration that each party will receive.

6. Cost Allocation: Responsibilities relating to construction costs, approvals, taxes and marketing expenses.

7. Approvals and Compliance: Obligations relating to obtaining statutory approvals, maintaining compliance and adhering to RERA requirements.

8. Possession: Terms for granting development possession to the developer and eventual possession of completed units to the landowner.

9. Termination and Default: Conditions under which the agreement may be terminated and consequences, such as compensation or refund.

10. Dispute Resolution: Arbitration clause, governing law and jurisdiction.

Sample Joint Development Agreement Format Online

Below is a general, simplified sample JDA format. It is for informational purposes only and should be customised by legal professionals.

JOINT DEVELOPMENT AGREEMENT

This Joint Development Agreement is executed on this ___ day of ____, 20, at __________.

BETWEEN

Mr./Ms./M/s __________________________,

residing at/registered office at ________________________________,

hereinafter referred to as the “Landowner”.

AND

Mr./Ms./M/s __________________________,

having its office at _________________________________________,

hereinafter referred to as the “Developer”.

WHEREAS

1. The Landowner is the absolute owner of the land bearing Survey No. ________, measuring ______ sq. ft., situated at ______________________.
2. The Landowner has agreed to grant development rights to the Developer for construction of a __________________ project.

NOW THIS AGREEMENT WITNESSETH AS FOLLOWS:

1. Grant of Development Rights

The Landowner hereby grants exclusive development rights to the Developer to plan, construct and market the project on the said land in accordance with approved plans.

2. Revenue/Area Sharing

The parties agree that the constructed property shall be shared as follows:

Landowner’s share: ______% or ______ sq. ft./units

Developer’s share: ______% or ______ sq. ft./units.

3. Responsibilities of the Developer

The Developer shall obtain all statutory approvals, carry out construction at its own cost, and ensure adherence to quality and safety standards.

4. Responsibilities of the Landowner

The Landowner shall provide development possession of the land, cooperate in signing documents for approvals and affirm clear title.

5. Costs and Expenses

All development, approval, marketing and construction-related expenses shall be borne by the Developer unless otherwise agreed.

6. Possession

The Landowner shall hand over development possession within ___ days. Completed units under the Landowner’s share shall be handed back upon completion.

7. Completion Timeline

The Developer shall complete construction within ______ months from the date of approvals.

8. Termination

In the event of breach or delay beyond ___ months, the aggrieved party may terminate this Agreement with mandatory notice and applicable compensation.

9. Dispute Resolution

Any dispute shall be referred to arbitration under the Arbitration and Conciliation Act, 1996. The seat of arbitration shall be __________.

10. Governing Law

This Agreement shall be governed by the laws of India.

IN WITNESS WHEREOF, the parties have executed this Agreement on the date first mentioned above.

Landowner: _________________________

Developer: _________________________

Witnesses: 1. ___________________ 2. ___________________

Conclusion

A Joint Development Agreement is an essential document for any land development project and needs to be prepared clearly. While each JDA tends to include the same main elements, each project will have its own nuances that will necessitate unique provisions relating to profit shares, timelines, compliance obligations and approvals. A properly prepared JDA will ideally model the risk aside from both the landowner and developer, reducing both risk and providing an opportunity for a smoother development outcome.

The sample form above is a general template. Anyone entering into a Joint Development situation should engage appropriately experienced real estate lawyers to draft a robust and legally compliant Joint Development Agreement specific to their transaction.