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Own a sizeable portion of land that you are looking to sell and make money? Wait. Have you considered JDA or Joint Development. JDA is one of the best options available if you own a large piece of prime land in the city and are looking for prospective buyers. It could even fetch you higher than market rates, provided you get sound advice on the JDA process and get things right. More about JDA below.
It is fairly common to see developers and builders enter into development related arrangements with land owners rather than making an outright purchase of the land identified for their project. Paucity of good parcels of prime land is one of key reasons developers go for such joint development through out the country.
Land owners may grant rights to develop their land under an agreement entered on mutually agreed terms and conditions. The development rights itself can be granted in three different ways, such as by a joint development rights agreement, sole development rights agreement and through a development services agreement. Joint Development is the most popular amongst these.
As described in Mint "In a joint development rights agreement, the owner provides the land free and clear of all title defects and encumbrances, and undertakes the development of such land along with the developer. In such arrangements, the land owner continues to own the land and shares the responsibility to develop the building project along with the developer. " The land owner and developer can either agree on sharing revenue out of sale or lease of the built-up space or owning the built-up space in an agreed ratio.
The Supreme Court of India has given concurrence to this proposition in the case of CAT v. Fazalbhoy Investment. In this case, the court held that there exists a concept of dual ownership in India wherein one person can be the owner of the land and another person can be considered the owner of the structure on that land. From the land owners point of view, a JDA enables an individual land-owner to cash in on the skyrocketing real estate prices, but at the same time, it also helps him/her to retain a portion of the land/property for his/her own use and living.
If you are looking at entering into a JDA, you must pay due attention to aspects like Service tax and Stamp duty, otherwise you may land yourself in trouble while parting with your land.
It is fairly common to see developers and builders enter into development related arrangements with land owners rather than making an outright purchase of the land identified for their project. Paucity of good parcels of prime land is one of key reasons developers go for such joint development through out the country.
Land owners may grant rights to develop their land under an agreement entered on mutually agreed terms and conditions. The development rights itself can be granted in three different ways, such as by a joint development rights agreement, sole development rights agreement and through a development services agreement. Joint Development is the most popular amongst these.
As described in Mint "In a joint development rights agreement, the owner provides the land free and clear of all title defects and encumbrances, and undertakes the development of such land along with the developer. In such arrangements, the land owner continues to own the land and shares the responsibility to develop the building project along with the developer. " The land owner and developer can either agree on sharing revenue out of sale or lease of the built-up space or owning the built-up space in an agreed ratio.
The Supreme Court of India has given concurrence to this proposition in the case of CAT v. Fazalbhoy Investment. In this case, the court held that there exists a concept of dual ownership in India wherein one person can be the owner of the land and another person can be considered the owner of the structure on that land. From the land owners point of view, a JDA enables an individual land-owner to cash in on the skyrocketing real estate prices, but at the same time, it also helps him/her to retain a portion of the land/property for his/her own use and living.
If you are looking at entering into a JDA, you must pay due attention to aspects like Service tax and Stamp duty, otherwise you may land yourself in trouble while parting with your land.
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