How builder-landowner agreements affect your risk as a buyer

In many Hyderabad projects the builder does not own the land. A landowner has put it in, and an agreement between the two decides who gets what. Buyers rarely ask about this agreement, yet a fight between builder and landowner is one of the common reasons a project stalls. It is worth ten minutes of questions before you book.

The usual arrangements

• Outright purchase. The builder has bought the land. There is one party to deal with, and this is the simplest case for a buyer.
• Revenue share. The landowner puts in the land, the builder pays for construction, and the two split the sale proceeds in an agreed ratio.
• Joint development agreement (JDA). The landowner gives the land and the builder develops it. The landowner is usually paid in built-up flats, sometimes in a share of revenue. The landowner keeps rights over the land until the project is complete, so the paperwork is more complicated.

Revenue share and JDA projects are both common in Hyderabad, and plenty of them are delivered without trouble. The risk is in what happens when the two sides disagree.

What can go wrong

• Delayed possession. A dispute over the ratio, the timeline or the money can stop work, sometimes for years.
• Incomplete paperwork. You may get possession while some land document or approval is still pending. That makes registration and resale harder.
• Cost cutting. A builder who is squeezed between what the landowner is owed and what buyers were promised may save money on materials or amenities.
• Litigation. Some projects are tied up in court over ownership claims, approvals or the revenue split, and buyers get caught in the delay.

What to check before you book

1. Which arrangement it is. Ask the builder directly: purchase, revenue share or JDA.
2. The land title and the agreement. The landowner's title should be clear, and the development agreement with the builder should be a registered document. Ask for a copy and have your lawyer read it.
3. Whose flat you are buying. In a JDA some flats belong to the landowner's share. If yours is one of them, find out who signs your agreement and who is responsible for delivering the flat.
4. RERA registration. Confirm the project is registered with Telangana RERA and note the completion date declared there.
5. Approvals. Check the building permission and land use, and any environmental clearance the project needs.
6. Dispute history. Find out whether the builder or the landowner has past or pending litigation, on this land or on earlier projects.

RERA gives you a route to a remedy if the project is delayed. It does not vet the title or the builder-landowner agreement for you, so do these checks even when a project is registered.

How to use what you find

Prefer builders who have already completed JDA or revenue share projects without disputes. Stay away from a project where a dispute is running or approvals are overdue, however good the price looks. And if you do see some delivery risk and still want the flat, say so when you negotiate the price.

If you want help reading a project's paperwork, book a call with a relai advisor. It is free for buyers.