A win-win situation is taking place between landowners and developers in Bangalore. Decades back, people use to take ownership of land in the speculative hope that they could sell them off at a profit. However, with the economic slowdown, they have become hard off when it comes to doing this. Paradoxically, there are Builders and developers who are rapidly expanding their holdings, and are in dire need of land to develop their homes upon. Thus both parties are now benefiting from this symbiosis.
Legally speaking, this is called a Joint venture agreement or a Joint development agreement. The owners of the plot give permission to the builders to examine it, and to construct their structures upon. At the end of this the plot owners retain the ownership.
The developer then gives the owners a percentage of the money depending upon the number of apartments to be purchased. The deposit is split into an advance that can be refunded or and one that cannot. The refundable one is offered back after the development of the project. Any escalations in cost, marketing campaigns, administrative costs and marketing expenses add up to this.
Whilst the offer is drawn up, a lawyer arranges for a copy of the JVA/JDA in which the terms and conditions are categorically stated. Upon signing of the document, a General power of attorney is also granted to the developer, which enables them to get all the necessary documents and approvals including all clearances.
Whereby the fact of the matter happens to be that the builder pays the advance to the owner, as per the agreement, and once the building is completed, the owner’s financial share is reverted back to them and the owner pays back the advance.
Given these facts, both the owners and the builders profit as the former do not have to develop the land and the latter can get the same at very low prices as compared to sales agreements which are fast becoming history in the city of gardens that is Bangalore.
Based on above information what you think? How it will impact if someone is looking for flats for sale in Bangalore. Post your valuable opinions on below comments.
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