A Development Agreement is a legally-binding contract between a Landowner and Developer which outlines the terms and conditions of the Landowner’s lease of their land to the Developer for the purpose of building a development using the Developer’s resources.
The Landowner’s consideration for the lease of their land may be in the form of a lump sum payment, a share of the developed property, or a share of profits arising from the development, as specified in the agreement.
Business owner in the business of real estate development can use this agreement to enter into contracts with landowners to develop a property for a specified period.
Depending on the terms of the development agreement, the landowner will easily receive ready benefits from his land, whereas the developer (business owner) will be able to develop land and profit from it without actually purchasing the land. This agreement can also contain a buy-out clause which enables the landowner (landlord) to purchase the interest of the developer (business owner).
This agreement often contains the following clauses:
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