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Real Estate & Property

Joint Development Agreements

A JDA decides who controls the land, who carries the risk and who is paid what, often for five years or more.

The Problem

What Is at Stake

In a joint development, the landowner contributes land and the developer contributes approvals, capital and construction. The agreement fixes how the finished project is shared, either as built-up area or as a share of sales revenue, and gives the developer the rights it needs to build and sell. Most of the commercial value is decided in a handful of clauses.

The difficulty is that a JDA is signed at the start of a project and tested years later. Approvals take longer than planned, markets move, developers run short of funds, and the landowner discovers that the power of attorney signed at the outset lets the developer do far more than expected. Unwinding a JDA after construction has begun is slow and costly for both sides.

KP Juris advises landowners and developers on structuring, reviewing and negotiating joint development arrangements, and on the options available when a project stalls.

Scope

Matters We Advise On

  1. Revenue-sharing and area-sharing structures
  2. Allocation of units, floors and common areas
  3. Development rights and the scope of the power of attorney
  4. Approval, construction and handover timelines
  5. Security for the landowner: deposits, guarantees and escrow
  6. Default, termination and step-in rights
  7. RERA registration and landowner obligations as a promoter
  8. Stalled or abandoned projects

Approach

How We Approach It

  1. 01

    Understand both positions

    Establish the land value, the development potential, the developer's record and what each party needs from the arrangement.

  2. 02

    Compare the structures

    Weigh revenue sharing against area sharing for this project, including how each handles delay, price changes and unsold stock.

  3. 03

    Draft the protections

    Tie the power of attorney, timelines and payments to milestones, with clear consequences when a milestone is missed.

  4. 04

    Plan for exit

    Agree in advance what happens on default, delay or deadlock, so neither side is locked into a failing project.

Key Considerations

What to Know Before You Act

Revenue share or area share

Area sharing gives the landowner specific units to hold or sell. Revenue sharing depends on sale prices and the developer's accounts, so audit rights and escrow matter.

The development power of attorney

A broadly drafted power can allow the sale or mortgage of the landowner's share. It should be limited to the developer's share and the project, and end if the agreement ends.

Default and exit clauses

Many JDAs say little about what happens if approvals are refused or construction stops. Termination rights, cure periods and the return of the land need to be explicit.

Tax at the right time

For individual landowners, capital gains on a registered JDA can arise when the completion certificate is issued, and GST may apply to the developer's side. Plan for both with your chartered accountant before signing.

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