Development Agreement is an indenture between the property-Owner and the property Developers/Builders whereby the property Owner grants the rights and liberty to the Developers/Builders to develop and construct the property for lawful consideration payable either in monetary terms or in the form of constructible units. A lawyer entrusted with the property documentation in the form of Sale/ Purchase Deed or Lease Deed, or Mortgage Deed, or Development Power Of Attorney or Transfer of Development Rights or  Agreement for Sale,  undertakes drafting of Development Agreement subsequent to the issuance of the Public Notice and drawing up of Search Report and issuance of Certificate of Title opining positively in favour of continuing the deal.

In drafting the Development Agreement a lawyer’s acumen is highly called for streamlining the issues relating to the property ownership and title, keeping in with the numerous provisions of diverse laws, Statutes, Acts that influence the property, its ownership thus creating the relationships vis-à-vis the property-Owner, Developers, Government and the prospective purchasers of the units in the building project, banking institutions and all other persons coming in contact with the project.

It is enjoined by the Development Agreement that the Developers shall carry out the development and construction activities as per the statutory provisions contained in relevant enactments relating to Town Planning and other relevant laws and regulations without entailing any adverse consequences on the property-Owner.

The rights and obligations of the Developers concerning the building project originate from the Developer Agreement. While either of the parties to the Development Agreement is a Foreigner (Non-Indian) then the provisions of the Foreign Exchange Regulation Act 1999 (FEMA) AND Reserve Bank of India Act 1934 are also attracted and the compliances thereunder become mandatory which aspect the law firm is highly expected to address.

The Development Agreement to be lawful and valid as also to become operative and cognizant with the several Authorities / Competent Authorities / Governmental Agencies / Building Departments /  Bankers, etc; associated with the property development and construction, needs to be properly stamped under statutory provisions of Stamp Enactments, and further the Development Agreement is also required to be registered in accordance with the procedure laid down by the Registration Statute.

The Development Agreement is drawn in the following Forms:

  • Development Agreement between Owner & Developer
  • Development Agreement of vacant land within ceiling limit
  • Development Agreement of land with building
  • Development Agreement in respect of vacant land held in excess of ceiling limit
  • Development Agreement for extension to the existing building
  • Agreement between Developer and tenant
  • Agreement of sub-development


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