Real Estate

An agreement for joint development

I am a property owner and I wish to enter into a Joint Development Agreement (JDA) with a developer. I have the following queries:

1- Are the JDA agreement, builders agreement and construction agreement the same document?

2. In a JV, is registration compulsory for both, the landowner and apartment buyers in Tamil Nadu (TN)?

3. Please advise on the registration fees in TN, and where it is done in Chennai?

4. Should amendments to the JDA be registered?

5. Does a Supplementary JDA need to be registered?

M. Pavan Kumar


At the outset, you should consult your lawyer and chartered accountant before settling the terms with the developer and go by their advice during the course of the project. However the following can be taken as general guidelines.

In a usual joint development scenario, the owner(s) enter into a JDA with the developer setting out the terms of understanding, such as the ratio of sharing of built up area in the proposed building, advance (refundable or non refundable), time for completion of the construction, consequences for delay/default, authority to obtain approvals, undertake construction, mortgage or sale of the developer’s share etc. As on date, there is no provision to register a JDA (including amendments or supplemental deeds) and the same would be valid and enforceable even without registration.

Once the building plans are approved by the statutory authorities, there will be a clarity in the details of the apartments, car parking slots and proportionate undivided share in land. At that point of time, an Allocation Agreement (supplementary agreement) can be executed, following the JDA, earmarking the apartments allotted to each of the parties. If the built up area of flats do not exactly match to the ratio agreed under the JDA, the parties can mutually agree to adjust the same on monetary consideration. The said document also does not require registration.

The developer may also require a Deed of Power of Attorney pursuant to the terms agreed in the JDA.

If the owner(s) retain their share of built up area, construction agreement(s) should be entered into with the developer and the same has to be registered. The stamp duty and registration charges would be 2% of the cost of construction and this document has to be registered in the sub-registrar’s office having jurisdiction over the location of the property.

As regards third party purchasers, sale deeds for undivided share of land and corresponding construction agreement would be registered in their favour. Though the agreements with the developer used to be called as Builders Agreement, after the introduction of TN RERA Rules, it is advisable to adopt the term Construction Agreement.

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Printable version | Feb 20, 2022 1:24:42 am |