What is a development agreement between landowner and builder?

A development agreement is a contract between a landowner and a builder/developer that grants the builder the right to develop the landowner's land — constructing residential or commercial buildings in exchange for a defined share of the developed area or sale proceeds.

Key Components of a Development Agreement

• Land identification and area survey details, title confirmation.
• Development scope type of project, number of floors, total built-up area.
• Developer's share percentage of constructed units or sale proceeds.
• Landowner's share units reserved for the landowner.
• Development timeline start date, completion milestones, possession schedule.
• Default and termination clauses.

Types of Development Agreements

• Joint Development Agreement (JDA): Revenue or area share model.
• Development and Construction Agreement: Developer builds; landowner pays cost.
• Power of Attorney Development: Developer acts as attorney to develop and sell.

A well-drafted development agreement is the foundation of a successful landowner-developer partnership. It must be precise about share allocation, timelines, quality standards, and termination rights with legal counsel engaged by both parties to protect their respective interests in what is often a multi-year, high-value transaction.