Under construction G+2 floor plan with additional tdr. Each floor two flats . 50-50 ratio. Builder died due to COVID but before that sold his share of 3 flats. Owner retains his 3. All (land owner+ 3 flat owners) ready to handover the construction and also allow tdr floor to new builder similar to earlier development agreement or go for new development agreement in lines of old one if needed Their proposal. New builder can finish construction and go for additional TDR floors for that they are ready to enter new development agreement in lines to old one if needed. My questions are : How do new builder proceed ? If new entity or person wants to take over the construction then should they enter entirely new development agreement ? Or can take over old one (if possible) ? what's precautions needs to be taken ? So that no future issues arise either from 1.surviving family members of builder. 2. From builder share, flat owners. 3. From original land owners.
Sir/Madam,
You are suggested to make on Memorandum of Understanding among surviving members of dead builder, Flat owners and original land owners reflecting all the facts and intentions of getting further development agreement with new builder. Then go for fresh development with new builder and then only further construction or development can be done.
New builder has to approach legal heirs of deceased builder
agreement has to be entered into between landowner ,new builder and legal heirs of old builder for carrying out additional construction,additional TDR
Yes new agreement needs to ve executed but the old builder may object.
It depends on the terms of earlier agreement done with the builder to guage the precautions
You may have to enter into a new agreement with the new builder based on the current status of the construction/building.
The agreement should contain all the conditions so that in case of a repeat incidence the things should move on legally, hence keeping a binding effect on the legal heirs of both the sides will ensure smooth process for both the sides.
Dear Client,
A Joint Development Agreement. This is an arrangement between an owner of the land and a builder where the land owner contributes the land and the developer undertakes the responsibility of obtaining approvals, property development, launching and marketing the project with the help of his financial resources.A land owner may come into an agreement with a developer only to develop the land under a fixed consideration which may be in cash or kind. The developed area is divided into plots and sold as plots only. Here again the Land owner may be owning the land as ‘Capital Asset’ or as’ Stock in trade’. Here the developer only gets paid for his services.One or more land owners may enter into an agreement with a Developer to construct a Building and then to share the Built up area in a definite proportion. Here again the Land owner may be owning the land as ‘Capital Asset’ or as’ Stock in trade’.A land owner may contribute his land to a partnership firm and then the partnership firm acts as the developer and develops the land. On the completion of the project profits are shared.The variation might be on other grounds too. The nature of the structure may be commercial or residential; the percentage of the benefit of land owner may be different and the time of passing on the benefits or project period may differ. In the case of sharing revenue from the built-up space, it is the responsibility of the developer to develop the parcel of land jointly with the land owner and sell or lease the built-up space to third-party purchasers/lessees and share the proceeds in an agreed ratio.The developer will have the right for specific performance which shall be specifically enforceable in a court of law if the land owner fails to cooperate with the developer in selling/leasing the built-up space on the land.However, in case of breach of the terms of the development agreement, the land owner would have the right to revoke the power of attorney.
Thanks & Regards
Thank you. Let me more honest. It's me who is going to venture into construction with some small funds. And the flat owner knows me and approached with this offer to take over. Apart from taking over as a builder who will get tdr floors rights(yet to be bought ) on finishing the pending works the all flat owners (purchased form builder n land owner with his share ) are willing to let go of flats at lucrative rate . I.e (If finished flat with amenities cost is avg 3000/sft then presently they are willing to let go at 2300/ sft (as is where is). My pending works cost 500/ sft . My profit would be 200/ sft. ) What kind of agreement should I choose ? ( apart from the developer agreement and mou to take over as builder) To lock in the said price and once flats are sold the remaining amount can reach me. (As once works finished they change their mind , I don't want to risk such ) P.S ; am giving no advance for flats . It's their proposition to give the flats at 2300/ sft and once pending works finish(quite a lot is left) , anything above that would be my consideration. How to make it" legally binding" so that no flipping will take place from owners once works are done ?? Which is most apt agreement . With reasonable stamp duty
Flat owners should enter into agreement for sale with you to sell the flats to you at rate of 2300 square feet
pay them token advance amount balance amount to be paid on execution of sale deed within 6 months or so
It's totally your discretion to select one of them
The proposed agreement should be made keeping in mind about all the aspects that are involved in this project and that will be useful to you or not going create any loss to you in future.
You can collect all the points to be included in the agreement and discuss with your advocate in local and draft an agreement which should be acceptable to him as well
Dear Client,
The stamp duty and registration charges would be 2% of cost of construction. Registration of Joint development agreement is important because at macro level neither the builder nor the landowner can dispute the terms and conditions of 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.
Thanks & Regards