Development Agreement : Advantages,How it Work,Implementation

What is the Development Agreement?

“Development Agreement” is an agreement between Developer (Which may be a builder, Contractor or Municipality) and owner of land or property (Building in case of redevelopment project)

Development Agreement

What are the advantages of the Development Agreement to each party?


  • Money (Also reimbursements for development costs);
  • Land (Public easements or rights of way);
  • Public infrastructure (or related reimbursement);
  • Regulatory Relief;
  • Deferral of annexation.

Development Contractors:-

  • Economic development (Additional jobs);
  • Infrastructural Advancements;
  • Development of the Locality

How did the Development Agreement work?

A development agreement is a legally binding contract between a property owner or developer and a local government, often including terms not otherwise required through existing regulations. These agreements can specify various elements of the development process ranging from the phasing of a larger master-planned community to tax-sharing for retail development, to critical infrastructure responsibilities.

Development agreements can also be used as an incentive. For example, suppose if a developer gives consent to enter into a deal to involve defensible space elements in large-scale development in the wildland-urban interface, the local government might offer reduced fees, expedited review, or even density bonuses in exchange. 

Implementation of Development Agreement:

To establish a development agreement, the developer and the local government both work with legal counsel to develop and execute a contract that binds all parties. 

During the implementation of such contract, planning staff should work in close collaboration  with their land use attorney, selected and nominated officials, and the public to decide the below-mentioned points:

  • What is the purpose of the development agreement? 
  • Are the benefits to the community balanced with those to the developer? 
  • Will these requirements be consistent for similar developments? 
  • Who will be involved in the development agreement process?
  • How will the agreement be maintained throughout the life of the agreement?

What are the basic clauses of Development Agreement?

  • The date on which the agreement is established and has to be executed;
  • Parties to the Development Agreement;
  • Address of both the parties;
  • Specific Area for which Development Agreement is coming into force;
  • The scope of work;
  • Compensation;
  • Confidentiality;
  • Insurance;
  • Terms of Termination;
  • Notice
  • Miscellaneous

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