Sibsankar Datta (Freelance) 12 January 2024

Procedure for change of consideration in jda.

If in a Area sharing Joint Development Agreement (JDA), the owner wants to get lumpsum consideration from the Developer at the nearing completion stage of the project, instead of getting alloted area shared, what is the procedure to be followed for lumpsum receipt by owner if the Developer agrees?

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Quick Summary

If you're in an Area Sharing Joint Development Agreement (JDA) and wish to receive a lump sum payment from the developer instead of your allocated share as the project nears completion, a formal process is required. This typically involves entering into a new or supplementary agreement, duly notarised and witnessed. This addendum must clearly outline the lump sum amount, payment terms, and conditions, and adhere to the Transfer of Property Act and Registration Act. Ensure all relevant stamp duties are paid according to the Stamp Act and comply with any state-specific real estate regulations.

2 Replies

T. Kalaiselvan, Advocate (Advocate) 13 January 2024

You can enter into a new or supplementary agreement with the builder for this purpose alone duly notarized and witnessed.

LCI Thought Leader Sanjeev Duggal Advocate 19 January 2024

The lumpsum consideration in a Joint Development Agreement (JDA) at the nearing completion stage is subject to the terms of the agreement. The Transfer of Property Act, 1882, governs property transactions, and the Registration Act, 1908, mandates the registration of such agreements. The lumpsum payment arrangement should be explicitly outlined in the JDA to ensure legal validity.

If both parties agree to a lumpsum payment, an addendum or supplementary agreement should be executed, clearly specifying the amount, payment terms, and conditions. It's crucial to adhere to the Stamp Act, ensuring proper stamp duty is paid on the revised agreement.Additionally, parties must be mindful of local state laws, as real estate transactions often involve state-specific regulations.