Development agreements, as with all legally issued agreements, are simple contracts signed by at least two parties—which, in this case, is the government and the person who owns a property under their jurisdiction—detailing both of their responsibilities to the property and the obligations they will serve in connection to it. These agreements don’t only cover the individuals involved during the actual negotiation and signing of the contract but their successors as well.
These simple agreements are essential for cases wherein the property involved will be subjected to extensive expansion or development, especially those that take more than a couple of years to complete. The development agreement will ensure that the developer of the property will not be affected by changes in the locality’s zoning laws that may happen over the course of the construction.
So if the local government’s laws about how a property can or cannot be used will change, say, two years into the development of the property, the aforesaid estate will not be affected and will continue to be under the jurisdiction of the previous laws as dictated in the agreement that both parties have signed. You may also see sales agreement samples.
However, the locality’s government will not simply agree to grant immunity to a developer. They will require some sort of recompense for it. Usually, the developer will have to provide benefits to the city, such as designing their property to include a public open space that will be available for the whole town. But, often, the “reimbursement” will come in the form of monetary obligations. You may also like business agreement examples.
Development agreements may also contain a long list of responsibilities left on the developer’s shoulder such as
This contract is signed by a tenant that states his fixed decision to lease the property in question once the development is done.
This agreement is issued by a landowner to be signed by a developer who agrees to carry out the development project.
This agreement is signed by both the developer and a purchaser, agreeing that the former will sell the finished result of the development project to the latter. This is usually signed before the beginning of the project’s construction, or even before the planning starts.
This agreement is similar to forward purchase agreement. However, in this case, the purchaser is also the one who will provide and cover the costs of the development. These simple agreements also often include pre-let agreements where there are already a sure number of tenants who will lease the building.
Some people criticize development agreements as undiplomatic. They argue that these documents are not the most ideal regulating tool either. However, since nobody has conceptualized a better idea for now, development agreements are the safest way for developers to buy themselves protection, and for the local government to make sure that they benefit from the transaction. You may also see what is a business agreement.
In this world’s ever-shifting municipal property rules, public demands, and complex land use regulations, developers do not have a firm hand by which they can rely on for certainty that their property will be protected against it all.
Development agreements exist to eradicate this dilemma. They are created to give developers a sense of assurance that irregardless of how the rules of their jurisdiction changes, the rights they were given when their project started will stay relevant. You may also like marketing agreement templates and examples.
Owning a piece of land is considered a much bigger asset than having cash in your bank account. It is basically a safety deposit whose value increases as the economy grows. It’s like having a piggy bank full of pennies without actually putting money inside. You may also see partnership agreement examples.
But most land owners are not satisfied with just that. They want to earn as much revenue from it as they can. This is why most of them choose to lease the property or manipulate it for commercial use. For the former, land owners would wait until the price of the property expands (along with the economy) and then lease it for an amount much bigger than what they have paid for the initial purchase. You may also like purchase agreement examples.
The latter, on the other hand, would need them to construct a building on the site. Aside from additional monetary investment, the construction will need to prepare documents that the local government will sign. Otherwise, the project will not be considered legal. You may also check out management agreement examples.
Aside from the standard building permits, the developer may also need to prepare a development agreement if he wants to set the specifications of the project to make sure that no complications will arise later on. The contract will be approved by the Planning Commission and Board of Supervisors, and both parties will set the terms of the standard agreement for a specific amount of time.
However, entering a contract with a local jurisdiction doesn’t happen just because a property owner initiates it. He must pass a series of inspection that will have to be conducted to make sure that the development reaches the standards set. These development standards include the following:
A development agreement will only be made official by observing county and city police power. They reserve the right to require funds, services, or infrastructure from one of the parties. New or different regulations may also be set by the development agreement if serious threat to public health and safety is found. The local jurisdiction to which the property falls under can only finalize a development agreement through a public hearing. You might be interested in service agreement examples.
Since most development agreements can last up to 5 years, it needs to be specific and thorough, especially since having it amended will take a lot of time. If possible, it has to have the ability to foresee any possible misunderstanding that may arise between the parties involved. By doing so, should there be any complications, there will already be solutions readily stated within the formal agreement.
It is highly advised that development agreements include specific resolution provisions such as the following:
For contracts and agreements concerning an external party, it is vital that the details be set out in advance. Whether you choose to hire an expert determination or opt to settle future arguments yourselves, you should specify this in the agreement. It should also be clear that all duties and improvements will be observed and implemented irregardless of an unsolved dispute.
Development agreements, irregardless of the countless disadvantages people think they hold, are essential to make every developer’s vision realized.
Although projects can still be finished without this basic contract, it may take a longer time since it will have to adapt and alter itself to fit the ever-changing regulations of the jurisdiction to which it falls under. This is a hassle that can be avoided by exerting a little effort that will equate to so much in the long run.