Beyond the Blueprint : Decoding RERA Compliance and Liability Allocation in Joint Development Agreements

Introduction : The real estate industry is growing at a rapid pace in India, and the sector is poised to play a crucial role in the nation’s economic development and urbanization in the years to come. Joint Development Agreements (“JDAs”) have become increasingly popular as urban land becomes more and more limited, whereby landowners contribute their land and developers commit to construction and the execution of the project.

In recent years, however, the use of JDAs has given rise to many legal issues under the Real Estate (Regulation and Development) Act, 2016 (“RERA”). Inter-agency involvement and the definition of the roles of the various participants introduces uncertainty over project registration, disclosures, and the distribution of risk and liability among landowners and developers. The legal situation is further complicated by disagreements over problematic titles, ongoing approvals, and project delays.

In this context, the following research question is explored: Does the current RERA regime adequately clarify the rights, duties and responsibilities of landowners and developers engaged in JDA? It also discusses the regulatory status of JDAs, current controversies regarding title and approvals, and/or the drafting of safeguards necessary to mitigate future disputes.

Legal Provisions

Real Estate (Regulation and Development) Act, 2016 (RERA) : The Real Estate (Regulation and Development) Act, 2016 provides the regulatory provisions for the real estate projects and mandates promoters to register, disclose and be accountable. Section 3 requires that real estate projects be registered with the Real Estate Regulatory Authority prior to advertising, marketing, booking and selling units. The promoters are required to provide information regarding the land title, approvals, sanctioned plans and other specific information about the project in Section 4 during the registration process. In addition, Section 11 puts burden on promoters to keep the projects transparent, ensure disclosure, and fulfill its obligations to allottees.

Section 12 covers remedies for wrong statements or false information and Sections 13 and 14 cover agreements for sale and compliance with approved plans and specifications. Section 18 and 19 takes care of the compensation and rights of the allottees if the delay, defects or failure to perform any of the statutory obligations. On the other hand, landowners could still be liable for problems associated with missing or tainted titles, undeclared liens, or lack of legal title. As per Section 2(zk) of RERA, a “promoter” would encompass a person who builds or makes it to be built an independent building or develops land as a project for sale. This definition holds relevance in JDAs as landowners can be considered as promoters, who might be involved in development, marketing or sale of units and thus subject to the statutory obligations under RERA.

Registration and Disclosure Obligations under RERA Rules : The relevant State RERA Rules define the documents and disclosures which are required for project registration, which include title documents, development agreements, sanctioned plans, approvals and encumbrance details. In JDA projects, such disclosure of landowner–developer arrangement is critical to help ensure transparency about ownership rights, development authority and project responsibilities.

Transfer of Property Act, 1882 : The main governance mechanism for JDAs is the contractual governance between landowners and developers. Transfers of development rights, possession and interest under such arrangements are governed by the Transfer of Property Act, 1882, and the principles of contract. The only specific framework for JDAs prescribed by RERA is a framework for contract allocation, covering the approval, construction, timelines and indemnities, which rely heavily on contracting.

Legal Analysis

Ambiguity in Treatment of Landowners as Promoters : One of the major questions under RERA is whether a landowner whose land is used in a JDA is a “promoter” under Section 2(zk). The developer normally carries out the building, marketing and sale of the units while the landowner owns the land and can be involved in the development. The lack of uniformity raises questions about the responsibility (or lack thereof) to register, disclose and fulfil duties to homebuyers.

In the long run, this could leave the landowners with unanticipated liabilities and cause conflicts between landowners, developers, and allottees on what should be the nature of their liability under RERA.

Disclosure and Transparency Challenges in JDA Projects : RERA mandates that the title documents, approvals, sanctioned plans, details about the project be made available by the promoters while registering the project; however, JDA projects come with intricate ownership and development scenarios. Failure to adequately disclose JDA terms, landowner rights, encumbrances, or approvals may impact the legal status of the project for homebuyers. The conflicts are often seen when developers start marketing or building prior to full statutory approvals or when defects are discovered in land title after some time has passed. These can result in project delays, litigation, and harm buyer confidence.

Uncertainty in Allocation of Liabilities Between Landowners and Developers : There is no specific liability mechanism for JDA arrangements in RERA and so there is a reliance on contractual allocation of liability. The responsibility of construction, completion, obtaining approvals, compliance with sanctioned plans and obligations to allottees under Sections 11, 14 and 18 RERA are typically vested in the developer. However, land owners could still have title problems, hidden liens, and the authority to the developer as provided by the JDA. But, with landowners’ status as promoters under RERA, there could also be a liability on landowners for project related obligations. This double liability brings uncertainty and often results in uncertainty about whether contractual arrangements can restrict statutory duties to home buyers.

Title and Approval-Related Disputes : JDA projects are especially susceptible to issues involving incomplete documentation of ownership, conflicting claims to land, approvals, and delays. The developer's powers depend on the landowner's title and development rights, so if there’s a problem with the documents, it could affect the lawfulness of the development. Likewise, if the environmental clearances, layout sanctions, commencement certificates or any other statutory approvals are delayed, it could lead to a delay in the project and claims for compensation from allottees.

Relevant Case Laws

Bikram Chatterji & Ors. v. Union of India & Ors. (2019) 19 SCC 161: The Supreme Court reiterated the protection principle of RERA and its provisions that the interests of the house-buyers must take precedence in any real estate dispute. The decision serves as a reminder of how important promoter accountability and regulatory compliance is to ensure transparency in housing projects.

Supreme Court in M/s Newtech Promoters and Developers Pvt. Ltd. v. State of Uttar Pradesh, (2022) 10 SCC 708, affirmed the jurisdiction of RERA authorities, stating that the promoter is still bound to adhere to the statutory provisions and complete the projects within the stipulated time. The judgment affirmatively states that contractual agreements cannot reduce statutory obligations under RERA.

Imperia Structures Ltd. v. Anil Patni, (2020) 10 SCC 783: The Supreme Court clarified that the remedies under RERA are in addition to other remedies available to the home buyers. The ruling reinforces the protection of the buyers as well as reaffirms the responsibility of the promoter for their obligations in relation to the real estate project.

In the case of Pioneer Urban Land and Infrastructure Ltd. v. Union of India, (2019) 8 SCC 416, the Supreme Court has held RERA constitutional and held that there is a need to enhance regulatory and accountability measures for the real estate sector. The order highlights the legislational purpose of safeguarding the rights of allottees against delays, unfair practices and lack of information.

In Vaidehi Akash Housing Pvt. Ltd. v. New D.N. Nagar CHS Ltd., 2022 SCC OnLine Bom 3476 (Bombay High Court), the role of landowners in redevelopment arrangements was discussed and it was observed that parties to development agreements can become liable for obligations based on their role and involvement in the development. The decision is significant for the analysis of when a landowner in JDAs would be considered a promoter under RERA.

In M/s SNG Developers Ltd. v. Akshay Kumar, 2023 SCC OnLine NCLAT 189, the NCLAT pointed out that conflicts over title, approvals and authority to develop land can have a profound impact on the rights of the homebuyers, and therefore, it is crucial that homebuyers engage in due diligence and establish clear contractual relationships between the homeowner and the developer.

Lafarge Building Materials, Inc. v. United States 571 F.3d 1330: The Court reiterated that it was significant for the complex development and construction arrangements to have clear contractual responsibility allocation. This determination reinforces the importance of thorough drafting by parties engaged in large projects in order to allocate risks.

P&T Architects and Engineers Ltd v Ove Arup & Partners Scotland Ltd [2015] EWCA Civ 691 (UK Court of Appeal): The Court discussed the professionals’ and contractors’ obligations in construction projects and emphasised the need to clearly define the obligations, standards of performance and exposure to liability.

Practical Implications

The doubts and uncertainty about JDAs under RERA have wide-ranging consequences for different stakeholders in the real estate business. On one hand, the landowner does not know whether he or she will be considered a promoter under RERA and what that means for them when it comes to liability to prospective home buyers.

For landowners, they are uncertain whether they would be deemed as a promoter under RERA, and what that implies if they are. Landowners’ contributions of land to a project, whether or not they are involved in land development decisions, marketing or unit sales, may leave them vulnerable to liability for disclosures, project compliance, and claims for compensation. Thus, landowners should make sure the land is properly documented and that their role and responsibilities in the JDA are clear.

The second is for developers, in which case careful due diligence should be carried out with regard to land ownership, development rights, statutory approvals and existing encumbrances. Title defect and delay of approvals can impact project registration, construction schedules and liabilities to allottees. The developers need to have clear and open disclosures, and add contractual safeguards against any risks that may stem from a dispute over the land.

Thirdly, from the perspective of a home buyer, when JDA structures are ambiguous, they can be left with questions about who they should be able to sue if a project is delayed, there are defects, or title issues arise. While RERA offers remedies against promoters, some conflicts of roles could emerge between landowners and developers, which could hamper enforcement of these rights.

Lastly, ambiguous JDAs require more due diligence before investment or financing the project for the investor and lender. Project viability, commercial value and issues with title, approval and promoter obligations may be a risk.

Conclusion

While JDAs have emerged as a valuable tool for real estate development, their growing adoption has also highlighted the lack of regulations in RERA, including regarding the rights of landowners, disclosure requirements, and liability for both landowners and developers. Though RERA has brought transparency and accountability in the real estate industry, lack of a dedicated framework regulating JDAs still poses uncertainty while dealing with title dispute, project approval or promoter obligations.

To mitigate these risks, JDAs should include appropriate representations and warranties regarding the title, including disclosures of ownership information and existing claims and encumbrances. The agreement should also clearly designate the roles in getting statutory approvals, project registration, construction obligations, etc. and compliance with RERA requirements. In addition, there should be specific provisions concerning indemnities, delay liability, defect obligation, termination rights and dispute resolution procedures that need to be carefully drafted to cover any conflict.

Drafting in detail makes the negotiations with JDA more complicated to start, but it makes them more certain as it will ultimately help to avoid litigations and to clarify the responsibilities of each party. A good structured JDA coupled with comprehensive due diligence and disclosures will be crucial in the coming days, to ensure compliance with the goals of RERA, and the balance of interests of landowners, developers, and homebuyers.

Author: Aaransha Shankar, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at  Khurana & Khurana, Advocates and IP Attorney.

Endnotes

1. The Real Estate (Regulation and Development) Act, 2016, No. 16 of 2016, §§ 2(zk), 3, 4, 11–19, Government of India, available at: https://rera.gov.in/sites/default/files/2018-04/RERA_Act_2016.pdf (last accessed 28 July 2026).

2. Bikram Chatterji & Ors. v. Union of India & Ors., (2019) 19 SCC 161 (Supreme Court of India).

3. M/s Newtech Promoters and Developers Pvt. Ltd. v. State of Uttar Pradesh & Ors., (2022) 10 SCC 708 (Supreme Court of India).

4. Imperia Structures Ltd. v. Anil Patni & Anr., (2020) 10 SCC 783 (Supreme Court of India).