Joint development agreement (JDA): what it means for a flat buyer

2.6.1 What is a joint development agreement?

A joint development agreement (JDA) is a contract in which a landowner lets a builder develop the land and sell flats on it. In return, the landowner gets a share of the finished flats, a share of the sale revenue, or both. The builder usually gets the approvals, funds the construction and markets the project. The JDA sets which flats go to each party, who signs each sale, and who pays which costs. The structure lets a builder start a project without buying the land first. A JDA is a normal structure, and it is not a warning sign in itself. For a buyer, it adds one question: which party is selling your flat, and does that party have the right to sell it? The answer is in the JDA, its allocation schedule and any power of attorney. Read them before you pay a booking amount, with a lawyer.

Term	What it means for you
Landowner’s share	Flats that the JDA allocates to the landowner. The landowner may sell them directly.
Builder’s share	Flats that the JDA allocates to the builder. The builder sells them.
Revenue share	The landowner gets a part of the sale money instead of, or as well as, flats.
Power of attorney	A document that lets one party sign for another, for example the builder for the landowner.

2.6.2 Who is responsible to the buyer in a JDA project?

Under the RERA Act, 2016, both the builder and a landowner who sells flats can be promoters, and they are jointly liable. Section 2(zk) defines a promoter. It covers a person who constructs, or causes to be constructed, a building of apartments for sale. It also covers a person who claims to act as the holder of a power of attorney from the landowner. The Explanation to Section 2(zk) is the key rule for JDA projects. It says that if the person who constructs and the person who sells are different, both are deemed promoters. Both are then jointly liable for the functions and responsibilities under the Act, rules and regulations. So a landowner who sells flats from the landowner’s share cannot say that delivery is only the builder’s duty. Section 4(2)(l)(A) also requires the promoter to declare legal title to the land. If the land is owned by another person, the declaration must include valid documents that authenticate that title.

RERA Act rule	What it says	Why it matters in a JDA
Section 2(zk)(i)	A person who constructs, or causes construction, for sale is a promoter	Covers the builder
Section 2(zk)(v)	A person who claims to act under a power of attorney from the landowner is a promoter	Covers a builder that sells for the landowner
Explanation to 2(zk)	If the builder and seller differ, both are promoters, jointly liable	Covers a landowner who sells flats
Section 4(2)(l)(A)	Declaration of legal title, with documents if another person owns the land	The landowner’s title is on the record
Section 4(2)(l)(B)	Declaration that the land is free of encumbrances, or details of them	Shows any loan or claim on the land

2.6.3 How do you find out if a project is a JDA?

The K-RERA project page is the quickest place to find out if a project is a JDA. Open the Promoter Details tab. It lists the company, its directors and the land owners. If the land owners are different people or companies from the builder, the project is likely a joint development or a similar arrangement. On newer K-RERA pages, the Land Details tab lists the land documents. These can include the sale title deed, the joint development agreement, the RTC, the mutation, the khata and the encumbrance certificate. Open each file to check that it is a real document, not a placeholder. Then compare the survey numbers and the land extent across the JDA, the title deed and your agreement for sale. A mismatch can be a typing error, but ask for a written correction before you sign. If the project has more than one landowner, there can be more than one JDA. Check that your tower’s land is covered by the JDA that you read.

1. Open the K-RERA page with the project’s registration number.
2. In Promoter Details, note every land owner’s name.
3. In Land Details, open the joint development agreement and the title deed.
4. Match the survey numbers and the land extent with your agreement for sale.
5. Ask the builder for the allocation schedule that shows your flat.

2.6.4 What does a JDA cost, and who pays it?

The landowner and the builder pay the stamp duty and registration fee on the JDA, not the flat buyer. The IGR Karnataka table of stamp duty and registration fees lists the joint development agreement in row 3(iii). It shows 2% stamp duty and a 2% registration fee, on the market value of the property that is the subject of the development. A registered JDA is a public record, so it shows up in an encumbrance certificate for the land. Ask the builder whether the JDA is registered, and for its registration number and date. Your own costs are separate. When you buy a flat, you pay the stamp duty and registration fee on your agreement and your sale deed. The stamp duty chapter explains those rates. The JDA can still change your costs indirectly. For example, it can decide who pays the cost of a landowner’s flats, or who pays for common amenities. Read the allocation of costs with your lawyer, and get any promise in your agreement for sale.

Document	Stamp duty	Registration fee	Who pays
Joint development agreement	2%	2% on the market value of the property under development	Landowner and builder, as the JDA says
Your agreement for sale and sale deed	See the stamp duty chapter	See the stamp duty chapter	You

2.6.5 What should you check before you buy a flat in a JDA project?

Before you book, confirm three things in writing: whose share your flat is in, who signs your documents, and where your money goes. The allocation schedule in the JDA, or a later supplementary agreement, lists the flats in each share. Ask the builder for the page that shows your flat number. If your flat is in the landowner’s share, the landowner may sign your agreement and sale deed. The builder may sign instead, but only under a power of attorney from the landowner. Ask whether that power of attorney is registered, and for its date. Then check where you pay. The K-RERA page shows the project’s designated bank account. Section 4(2)(l)(D) of the RERA Act requires seventy percent of the money from allottees to go to a separate account. Ask your lawyer if a landowner’s sale must use the same account. If the booking form names one party and the receipts name another, stop and ask why. A clear, written answer before booking is easier to get than one after.

Question	Document that answers it
Is my flat in the builder’s share or the landowner’s share?	Allocation schedule in the JDA
Who signs my agreement and sale deed?	JDA and any registered power of attorney
Does the seller have title to the land?	Title deed and the promoter’s declaration under Section 4(2)(l)(A)
Is the land free of loans or claims?	Encumbrance certificate and the declaration under Section 4(2)(l)(B)
Where do I pay?	K-RERA designated account and your agreement for sale

Sachi reads the Promoter Details and Land Details tabs on K-RERA for Bangalore projects. To see the land owners and JDA filings for a project you like, Ask Sachi.