A property is a true asset of its owner. No matter how much it is worth, it is the value it holds that makes it so special to each and every owner.
A joint development agreement or JDA is an agreement that arises between a property’s owner and a developer wherein the developer offers services to the said owner. The agreement, although with the same basic meaning, could still vary.
The reason to invest in property completely depends on the investor, however, the most common reason for investing in residential properties such as land is to build a house. In the case of a joint development agreement, the owner of the land allows the selected developer to take up the responsibility for the development of the property. At the same time, the same developer also takes up other responsibilities including marketing and selling of a part of the project or the whole project itself, which is a significant task in itself.
In a joint development agreement, the owner of a property contributes their land portion to the developer and trusts that they will handle all the development and responsibilities as is expected by default. The developer also takes care of the cost of development as well as construction as per the agreed guidelines that also abide by the law.
For the owner in a joint development agreement, a safe way to go about it is to learn about the reputation of the developer before getting into an agreement in the first place; the more reputable the developer, the more reliable they are at everything including marketing. Likewise, a developer also ensures to deal with only rightful land owners through research and supporting documents. As a JDA can include benefits such as benefitting from a share of sales revenue provided by the developer, the owner can easily consider getting into such an agreement. The stamp duty is also far lesser in the case of JDA (1% of the market value of the property) as compared to the same in the case of possession (5% of the market value of the property). Moreover, as in the case of any other agreement, JDA only holds good as long as it is registered (at the applicable sub-registrar’s office) and thus recorded as per the law.
In a joint development agreement, despite the developer having to bear all responsibilities related to development as well as marketing, they will still have many benefits such as not having to invest in land purchase. At the same time, the owner clearly bears all investment related to land purchase but is able to relax after getting into a JDA by not having to bear any cost regarding development. After getting into a JDA, the developer very likely completes the construction at a fast pace with the least probability of any pauses, given their large responsibilities including the financial burden that must be handled by them.
Other than the clear benefits that a landowner enjoys through a joint development agreement, they still remain the owner. In fact, many developers who enter the JDA even offer relevant land owners a certain percentage of the project that they are undertaking on the said parcel of land. As a successful JDA is completely dependent on the involved owner and developer, the two parties must take care to keep a good ongoing rapport.
If you plan to invest in a property in Mysore, going through a reliable real estate consultant ensures a secure investment. A reputed property consultant like GSS Projects lets you take a breath of relief even if it involves a joint development agreement. Contact us to know where to start.