A landowner is a person who owns a piece of land and agrees to a joint venture with the builder to develop a part of the land in the form of flats, villas, houses, apartments, etc. Here both the parties agree to build a venture. Hence the land owner agrees to share the land and the builder builds the whole project and both the builder and owner share the property as per their agreed terms after completion of the project.
The builder and the land owner make an agreement duly signed with the witnesses with the concerned Registration Office by paying the required stamp duty and fees.
So the builder sell the builder’s share as per their agreement and the land owner sell his share and vice versa after the completion of the project. If a buyer wants to purchase the land owner’s share, before buying he has to verify and implement the list of must-do things which are mentioned below. Here we take an example of an apartment in this discussion.
List of things a buyer must know before buying.
Before commencing the project both the parties i.e. land owner and builder agrees to build an apartment and share the apartments as per their written agreement which is called Joint Development Agreement. So here a buyer must look into all the documents related to the land and its legalities. You must know whether you are buying a builder’s share or a land owners share because they share the apartment 50:50/ 60:30 ratio or as per the agreement. Here purchasing builders share is easier and safer than buying a land owners share. Check all the legal heirs mentioned in the JDA Joint Development agreement and signed it or not.
Buyer must execute a tri-party agreement that should be between builder, landowner, and buyer because if you buy an apartment from a land owner by paying the full amount by luring with special discount offers sometimes he may not complete the project and may be delayed in possession because here builder has the skilled labor and required a team to complete the project. Hence insist the land owner involve the builder in an agreement of sale instead of a bilateral agreement.
Make a standard agreement with all the needed points which safeguard the buyer’s interest till his safe possession by duly signing the agreement of sale with both builder and land owner.
A buyer must know who has the selling rights of the landowners share of the apartment. Sometimes builder does take marketing rights of the owner’s share and the builder has total control of the owner’s share. Insist to include the land owner in the agreement of sale and sale deed.
The buyer should pay the amount partially, accordingly as per the development of the project or agreement value. Final due money should be given when completion, possession of the property, or when the property is registered. Never make full payment before possession to the landowner.