Joint development is a popular method of development of property. Here, an owner of a site and a developer come together to enter into an arrangement to develop a property jointly.

In case the owner of a site decides to develop the property on his own, he will have to arrange for funds, look for a builder, monitor the construction and go through all the associated formalities. The cost of land constitutes a major portion in the cost of development. It is difficult to get finance for the entire cost of a site. An owner has to block a lot of his own funds before he can get any returns.

On the other hand, if a builder has to come up with a new project, he has to procure or buy land for the project which may again take up a reasonable amount of investment or fund blockage.

Typically, the owner of a land and a builder with ready funds for development come together in an agreement and jointly develop the property and share the profits

The option of joint development saves on all these requirements for both the parties. The practice is being followed both by small and large builders without exception over the past many years. The builder and the owner of the site develop the property on a joint venture basis. The land owner enters into a joint development agreement with a builder. The land is provided by the owner. The builder constructs the residential or the commercial project as per the agreement terms.

This way, it suits the needs of both the parties. The owner of the site does not have to get into the trouble of constructing the property, nor has he to arrange for funds for construction. At the same time, the builder gets access to land and does not have to raise money for the purchase of land. The builder need not block his funds and in fact can use his resources for a number of projects simultaneously.

A certain percentage of the area is earmarked for the owner of the site. The owner is entitled to dispose of the constructed property delivered to him under the joint development agreement. The owner may also decide to retain his share of the built-up area, or may sell it off at a later stage without any involvement of the builder. The other built-up area is sold by the builder directly.