Law requires written agreements for land owner-developer housing projects 

Joint-venture housing projects between landowners and developers are common in Dhaka. But disputes can arise over the distribution of flats, construction deadlines and other responsibilities. 

The Real Estate Development and Management Act, 2010 requires written agreements to protect the interests of both parties.

Under these arrangements, the landowner provides the land, while the developer finances and manages the construction. After completion, both parties receive an agreed share of the flats and other facilities.

However, the law does not set a fixed percentage for dividing flats between landowners and developers. The two parties can decide their respective shares through negotiation and include the terms in a formal agreement.

Section 10 of the Real Estate Development and Management Act, 2010 requires a written bilateral or joint-venture agreement between the landowner and developer before a project is developed.

The agreement must specify the developer’s share, the starting and completion dates of construction, and the terms of the power of attorney needed to transfer the developer’s flats to buyers.

A verbal understanding is not enough to protect either party. The agreement should clearly state the number of flats each party will receive, their sizes, floor levels and locations. It should also specify the allocation of parking spaces and other facilities.

The Code of Conduct of the Real Estate and Housing Association of Bangladesh (REHAB) also recommends specifying each party’s percentage share, the approximate size of the flats allocated to the landowner and the number of parking spaces in the agreement.

However, REHAB’s code is an organisational guideline, not a law enacted by Parliament.
The 2010 Act also sets out other obligations for developers. Section 6 deals with developer registration and project approval, while Section 18 requires details of building designs, construction materials and fittings to be included in the agreement or allotment letter. Developers must also follow the approved building plan.
The law provides penalties if either party fails to meet contractual obligations.

Under Section 28, a landowner who fails to hand over possession of the land to the developer within the agreed period may face up to two years in jail, a fine of up to Tk 10 lakh, or both.

Similarly, Section 30 provides for up to two years in jail, a fine of up to Tk 20 lakh, or both if a developer fails to hand over the landowner’s agreed share within the stipulated time.

Legal experts advise both parties to check ownership documents, project approvals, construction deadlines, flat and parking allocations, and termination conditions before signing an agreement.

A lawyer’s review of the agreement can help prevent misunderstandings and reduce the risk of disputes during project implementation.

The success of a joint-venture housing project depends on a clear agreement and a fair balance of interests. Specifying each party’s share and responsibilities in writing can help protect both landowners and developers.