This agreement is different from a typical joint venture, the result of which is the sharing of the final proceeds (of completed houses, units or dwellings), since the development agreement is a participation for the benefit of the owner of the land, who pays the developer a royalty for the development of the land. Each JV agreement is tailored to your personal needs and there is no „right way“ to manage development costs and profit sharing. Now, you have to ask yourself why it is important to register JDA. At the macro level, neither the developer nor the landowners can challenge the terms of the registered JDA. Second, it gives the agreement authenticity. In one case, I found that there were 23 corrections in the Joint Development Agreement. It was almost impossible for the buyer to know if the corrections were real or not. On the other hand, if the joint development agreement is registered, the buyer can request a certified copy directly from the sub-registrar`s office. With regard to a sales DA, the parties should ensure that the sale price and all other funds to be paid under the agreement are properly structured in order to avoid unnecessary tariff and tax consequences. In order to avoid the creation of a constructive trust, the parties should ensure that the development contract does not give the developer the power to require the transfer of land to a particular party for the benefit of the sale to the developer. Another idea is who can choose the name of the development (including street names for large land subdivisions). It is very normal for the landowner to transfer rights/title to the property to his family member as part of family regulations.
These transfers are made by GPA. In other scenarios, the landowner asks the buyer to transfer the money to a family member. The reason for these scenarios is „the heir.“ The country is hereditary and, in most cases, I have observed that the joint development agreement is signed by 15 to 20 people, including children under the age of 10. In such cases, either one of the landowners holds surrogacy from all stakeholders, or there is a family comparison agreement between landowners to allow a person to transfer the property through surrogacy. In many cases, I have observed that landowners own benami. Therefore, the buyer should be especially careful. If the parties intend that the developer has the right to submit a reservation on a property, it will be important, in the development agreement, to carefully define the right to make the reservation. It may be preferable for the parties to use other safeguards to protect the developer`s permissions. If you would like to discuss your next development or even your current evolution, do not hesitate to contact us. Compared to other costs, the developer typically funds development costs until funding is available. The JV agreement must indicate the exact amount of capital contribution expected by each member. In addition, it is also necessary to indicate when this capital matures.
For example, a capital owner may agree to contribute 25% of the necessary capital, but only if this contribution is made in the last phase of the development process (last money).