The Transfer of Development Rights primarily involves the passage of development and constructible capacity of the land, which becomes restricted for the construction activities, to the land which is permitted to construct and develop the additional space by the operation of building regulations and enactments.
The Town Planning Enactments and Municipal laws provides for the reservation and acquisition of certain lands (of private and state ownership) for the purposes of public utility and in the general interest of the urban development. For e.g. Reservation for Garden, Flora-n-fauna, School, Public Transport, Forest, Swimming Pools, Road Widening, Play grounds, etc. Thus, the reservation of land as aforesaid prevents the land owner to legally use and construct the same for residential or non-residential purposes. However, with a view to compensate the land owner in lieu of the reservation the law entitles the land owner to move the development potential of the land to some other constructible land as permitted. Here, the Agreement for Transfer of Development Rights plays its role in the aid of the land owner thus enabling such owner to avail developmental or monetary benefits.
Recently, the Slum Improvement & Redevelopment legislations had also incorporated TDR process with the intention of better and planned development and healthy urbanisation. With the redevelopment of the slum areas, the Developers are given incentives to obtain sale component in the form of TDR after providing dwelling units in the new buildings to the hutment dwellers whereby the Developers are granted Development Rights Certificate (DRC) by the appropriate Authority acting under the relevant enactments and thus are able to take and transfer the TDR to other lands after fulfilling all the stipulations laid down by such enactments.
The drafting of Deed of Transfer of Development Rights also involves like in case of Sale/ Purchase Deed or Development Agreement & Development Power Of Attorney or Agreement for Sale, issuance of the Public Notice and drawing up of Search Report and issuance of Certificate of Title by a competent lawyer.
The Agreement for Transfer of Development Rights is governed by the various enactments relating to Contract, Stamp duty, Registration, Building & Urban Development Regulations, Town Planning, Municipal Bodies, Slum Redevelopment, etc.
Drafting of TDR Agreement is in keeping with the Development Agreement and the Development Power of Attorney.
TDR Agreement is drawn in the following Forms:

  •      TDR Agreement between Owner & Developer
  •      TDR Agreement between the Municipal Bodies/Competent Authority
  •      TDR Agreement of land acquired for Road Widening
  •      TDR Agreement of Slum Redevelopment
  •      TDR Agreement in respect of land reserved for Public Utility
  •      TDR Agreement between two/more Developers
  •      TDR Agreement between Developer and tenant

[The above list is not exhaustive]