Navigating Joint Development Agreements (JDAs): Legal Risks, RERA Compliance & Best Practices

Joint Development Agreements (JDAs) have emerged as a preferred legal framework for real estate projects, especially in metropolitan and semi-urban areas where landowners and developers seek to collaborate without a complete transfer of land ownership. Under a JDA, the landowner typically contributes the land, while the developer brings in the capital, expertise, and resources to execute the construction. In return, the parties share either the revenue generated from the project or the constructed area, based on pre-agreed terms. While the model is advantageous for both sides, it demands careful legal and regulatory planning.

One of the most common legal risks in JDAs arises from title-related issues. Developers often face hurdles when landowners are unable to provide a clear and marketable title or when the property is subject to existing encumbrances, disputes, or pending litigation. Therefore, conducting thorough due diligence, including verifying the Encumbrance Certificate and land revenue records, is critical before executing a JDA. Inadequately drafted agreements can also result in significant complications. Ambiguity in clauses relating to profit-sharing, development timelines, handover obligations, and responsibilities during construction may lead to costly and prolonged disputes. Further, the tax implications under JDAs are nuanced—capital gains tax, GST, and stamp duty must be accounted for based on the specific structure of the deal and the timing of rights or possession transfer.

From a regulatory standpoint, the Real Estate (Regulation and Development) Act, 2016 (RERA) plays a key role in governing JDAs. Any real estate project being developed under a JDA that involves the sale of units to buyers must be registered with the relevant RERA authority. The developer, who is responsible for execution and marketing, must ensure that all approvals, title documents, and sanctioned plans are uploaded and disclosed. Importantly, if the landowner allows their name or image to be used for promotional activities, they may be considered a “co-promoter” under RERA, thereby incurring joint liability for project delivery and compliance.

In the evolving regulatory climate of 2025, best practices dictate that JDAs should be drafted with precision and foresight. Defining the respective roles and obligations of the landowner and developer, incorporating robust indemnity clauses, and registering the development power of attorney are vital steps. Legal advisors must also guide clients in aligning with both RERA and tax regulations to avoid future liabilities. Furthermore, with digital documentation and online project tracking gaining ground, timely compliance and transparency can significantly reduce the risk of regulatory or legal action.

As JDAs continue to be a critical mechanism for real estate growth in India, a well-structured agreement, aligned with legal mandates and backed by strategic planning, remains key to a successful and dispute-free project. For further guidance or review of your JDA documentation, our real estate legal team is here to assist.