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What is a Real Estate Development Agreement?

If you are a real estate developer, you should consider making Real Estate Development Agreements in order to safeguard your interests when you are planning to offer real estate development. By accepting this agreement with each other, both parties will be more likely to share the same set of expectations. Different from many other websites you might stumble upon, there's more to Rocket Lawyer than just templates. If the client won't pay or there's any other problem, your Rocket Lawyer membership offers the optional benefit of Document Defense® support from an attorney.

When to use a Real Estate Development Agreement:

  • You own property and want it developed-residential or commercial.
  • You're a construction contractor getting ready to develop property.
  • You manage a government office that deals with property development.

Sample Real Estate Development Agreement

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Real Estate Development Agreement


THIS REAL ESTATE DEVELOPMENT AGREEMENT (this "Agreement"), is made as of , by and between ("Developer") located at , , and, a ("Owner") located at , , .


Owner is the owner of certain developable lots located at , , (the "Property").


Owner desires to develop the Property as a quality, cost-efficient, development to be marketed to first-time home buyers (the "Project").


Developer is a development company with substantial expertise and experience in the development of Property.


Owner desires to retain Developer to develop the Property and market the same for sale, on the terms and conditions set forth in this Agreement.


NOW, THEREFORE, Owner and Developer, in consideration of the foregoing and the mutual covenants set forth herein, hereby agree as follows:


Responsibilities of Developer


Developer shall devote all such time, effort, resources and skill as may be necessary for the efficient development and marketing of the Project. Such responsibilities shall include but shall not be limited to the following:


A. Development Plan


Developer has developed a detailed plan for Owner's review and approval (as so approved, and as amended with Owner's prior written consent from time to time, the "Development Plan") for developing the Property as a marketable [5 Provide the purpose of the development plan]. A copy of the current version of the Development Plan is attached hereto as Exhibit A.


B. Review of Development Plan


By not later than days prior to the expiration of each calendar quarter Developer shall review the Development Plan for accuracy, feasibility, efficiency and profitability. Within days after such review date, Developer shall propose to Owner modifications to the Development Plan to take into account then-current information and circumstances and to enhance the overall success of the development. Such proposed modifications as are approved by Owner shall be incorporated as modifications to the Development Plan.


C. Accounts, Records and Reports


Developer shall create, maintain and deliver the accounts, records and reports pertaining to the Agreement.


D. Entitlements


Developer shall consult with and advise Owner on (i) matters relating to land use entitlements affecting the Property and compliance with any outstanding requirements and conditions imposed upon such land use entitlements, and (ii) required or advisable modifications to such entitlements or additional entitlements, if any. If and as Owner so requests, Developer shall assist or represent Owner in obtaining such modifications or additional entitlements.


Developer's Forces


Except as otherwise specifically provided in this Agreement, Developer shall perform its services hereunder using its own personnel and other resources for the compensation described hereof and for no other compensation or reimbursement. In performing its services hereunder, Developer shall at all times maintain sufficient in-house staff and facilities of appropriately high quality to accomplish the purposes of this Agreement. Developer may delegate the performance of one or more of the above services to a corporation which is an Affiliate (hereinafter defined) of Developer, provided, however, any fees, charges or reimbursements payable to such Affiliate shall constitute Project Costs only to the extent that they would have constituted Project Costs if Developer were directly performing such responsibilities. For purposes of this Agreement, an "Affiliate" is any corporation, partnership or sole proprietorship in which Developer owns, directly or indirectly, a twenty-five percent or greater beneficial interest.




Developer may delegate appropriate portions of its obligations hereunder to architects, engineers, expediters, market researchers and consultants, and sales agents and brokers if and to the extent provided for in the Development Plan or otherwise with Owner's prior written approval.




All Subcontracts shall be entered into by and for the account of Developer and not as agent for Owner, and shall explicitly so state. Developer shall include in its Subcontracts a provision making Owner a third party beneficiary thereof, and shall, upon Owner's request, assign all Subcontracts to Owner for its benefit, effective upon termination of this Agreement.




The services to be provided by Developer hereunder shall be provided in phases as follows:




Timing of Development


Owner acknowledges that the outline of Development Plan represents the collaborative effort of Owner and Developer and that Owner intends to proceed with the Project if it is reasonably convinced that the Development Plan can be executed in a sufficiently profitable manner. However, Developer acknowledges that Owner has not yet committed itself to the development of the Project, but has elected to defer that decision until the Development Plan has been completed and Owner has had an opportunity to review the Development Plan. Therefore, except as otherwise specified by Owner in writing, performance of the Planning Phase and other phases of the project shall not commence unless and until Owner has approved the Development Plan with respect to each such Phase and given Developer its explicit notice to proceed with each such Phase. Owner will only provide notice to proceed with respect to Phases II and any subsequent phase once construction of the previous Phase has substantially progressed and the results of initial marketing efforts with respect to such previous Phases are available. Owner may delay commencement of any Phase, or elect not to proceed with any Phase.


Books and Accounts


Developer shall maintain complete and accurate accounts and records reflecting all of the assets, liabilities, expenditures, revenues, operations, transactions and financial condition of the Project. Such books and accounts shall be kept in accordance with generally accepted accounting principles consistently applied. Owner shall be entitled at any time on reasonable prior notice to inspect, audit and copy such books and accounts.


Financial Reports


Developer will prepare and furnish to Owner, not less frequently than quarterly, trial balances, in form approved by Owner, setting forth the financial condition and results of operations for such period.


Cash Flow Projections


At least days prior to the expiration of each calendar quarter, Developer shall provide Owner with cash flow projections for the next ensuing quarter.




Owner may object to financial reports or projections or portions thereof by written notice to Developer to be delivered within days after receipt of such statement. Such notice shall set forth in reasonable detail the nature and bases of such objections. If the parties cannot resolve any such objections by agreement within days after delivery of the notice thereof, the dispute shall be submitted to arbitration.


Accounting and Tax Procedures and Elections


All decisions as to accounting principles and elections, whether for book or tax purposes (such decisions permissibly being different for each purpose), shall be made by Owner after consultation with Developer.


Deposit of Funds


All funds, monies and receipts relating to the Project are and shall be the sole property of Owner and shall be deposited and held in accounts with such banks or other institutions as Owner may select in its sole discretion. Owner may, at its election, provide to Developer authority to draw upon any of such accounts in accordance with this Agreement, but such authority, if given, shall not create in Developer any ownership interest or other rights in such accounts or the amounts held therein


Monthly Activity Reports


Developer shall provide to Owner monthly activity reports by the fifteenth of each month, in a form approved by Owner, setting forth the major items completed since the prior such report, the items anticipated to be completed prior to the next report, the scheduled dates of their completion, estimated revised dates, if necessary, and any circumstances discovered by Developer which may have a material impact on the Project or the Development Plan and which have not previously been called to Owner's attention in writing.


Notice of Hearings


Developer shall provide Owner with a notice of all public hearings involving the Project, in sufficient time to enable a representative of Owner to appear at such hearing if so desired.


Governmental Reports and Notices


Developer shall provide Owner with copies of all governmental filings, all permits and reports issued by any governmental authority affecting the Project, and copies of all significant documents such as soil reports and engineering reports.


Weekly Sales Reports


After the commencement of sales activity, Developer shall provide Owner with weekly sales activity reports in a form approved by Owner.


Additional Reports


Developer shall furnish Owner such additional reports on the operations or condition of the Project as may reasonably be requested from time to time by Owner.


Weekly Meetings


Authorized representatives of Owner and Developer shall meet once a week, or more frequently as needed, to discuss the progress of the Project, its conformity to the Development Plan, proposed changes to the Development Plan, and such other matters as the parties may desire to discuss.


Owner Representative


Owner may from time to time designate one or more of its personnel (each an "Onsite Observer") to be located in Developer's offices at the Property and otherwise accompany Developer personnel conducting Project business on or about the Property for the purpose of obtaining a detailed understanding of the means, methods, approaches and techniques used by Developer in providing the services to be provided by Developer hereunder. The Onsite Observers shall have reasonable access to all information controlled by Developer relating to the Project. Developer shall not, however, be obligated to disclose to the Onsite Observers detailed information not generally available to the public relating to Developer's proprietary steel framing techniques. Developer acknowledges and agrees that the Onsite Observers are to be designated solely for the purpose of educating Owner as to development techniques in general, and that the Onsite Observers shall have no control over, or responsibility for, Developer's means, methods or techniques, or for any errors, omissions or wrongful actions committed by Developer, its personnel or any Subcontractors, whether or not observed by an Onsite Observer. Developer shall take reasonable steps to ensure that no third party develops a contrary understanding of an Onsite Observer's role and responsibility based on Developer's statements, actions or omissions.




To the fullest extent permitted by law, Developer shall indemnify and hold harmless Owner, its officers, directors, shareholders, employees and agents from and against all loss, cost, liability, claims and expenses, including but not limited to attorneys' fees and disbursements, arising out of or resulting from the actions or omissions of Developer, any Subcontractor, or any officer, employee or agent of them which are negligent, wrongful or in breach of this Agreement. To the fullest extent permitted by law, Owner shall indemnify and hold harmless Developer, its officers, directors, shareholders, employees and agents from and against all loss, cost, liability, claims and expenses, including but not limited to attorneys' fees and disbursements, arising out of or resulting from the actions or omissions of Owner, or any officer, employee or agent of Owner, which are negligent, wrongful or in breach of this Agreement. The foregoing shall not limit any other right of indemnity to which any of the indemnified parties may be entitled, and shall not be limited to or by any insurance coverage which may be in force or required to be in force.


Developer's Insurance Coverage


At all times during the term of this Agreement the Developer shall obtain and maintain in full force and effect the following insurance coverages:

A. Liability Insurance


Comprehensive General Liability Insurance, with Broad Form Endorsement, on an "occurrence" basis, with limits not less than (with aggregate limits applying separately to the Project), in form and with additional endorsements reasonably required by Owner, including, without limitation, cross-liability endorsement, owners and contractors protective liability endorsement, contractual liability endorsement covering Developer's indemnities in favor of Owner contained herein. Said coverage may be supplied through an umbrella policy provided that there is no reduction in coverage to limits below those required herein. Said coverage shall name Owner, its directors, officers, agents and employees as insured, and shall be primary with respect to any insurance or self-insurance maintained by them.


B. Workers' Compensation Insurance and Employers' Liability


Workers' Compensation Insurance, as and to the extent required by applicable State or other law for all employees to be engaged in work of the Project and, with respect to any such work which is Subcontracted, Developer shall require all Subcontractors similarly to provide Workers' Compensation and Employers' Liability Insurance for all of the latter's employees to be engaged in such work.


C. Subcontractors' Insurance


Developer shall require all of its Subcontractors to maintain insurance coverage. Developer shall be responsible for ongoing compliance by its Subcontractors with such requirements and shall provide evidence that such coverages are in place to Owner upon Owner's request.


Owner's Property Insurance


Owner shall purchase and maintain property insurance in the amount of the estimated Cost of the Work under the Agreement. Owner's property insurance shall be on an all-risk policy form and shall insure against the perils of fire and extended coverage and physical loss or damage. Developer shall bear losses to its insurable interests not covered because of deductibles under Owner's property insurance coverage.




Both parties, for themselves and their respective officers, directors, agents, employees and Subcontractors, hereby waive all rights of subrogation of the insurers under all policies of insurance now or hereafter during the term of this Agreement or any extensions or renewals thereof, existing or purchased by either or both parties, and insuring or covering the Property, the Project or the activities described herein. The policies shall expressly permit the waivers of subrogation contained in this Section. This waiver of subrogation shall be effective as to a person or entity even though that person or entity would otherwise have a duty of indemnification, contractual or otherwise, did not pay the insurance premium directly or indirectly, and whether or not the person or entity had an insurable interest in the property damaged.


General and Administrative Costs and Expenses


It is the intent of the parties to this Agreement that Developer, through its officers and employees, shall, except as otherwise specifically provided, devote its own time, effort and skill to accomplish the purposes of this Agreement. Developer will provide the use of its personnel, resources, organization and facilities for the benefit of the Project. In so doing, Developer will incur certain administrative and overhead expenses, the exact amount of which is difficult to ascertain. Regardless of the amount actually so expended by Developer, Developer shall be compensated for its general and administrative costs and expenses solely by payment to it of a fee (the "G&A Fee") for each Phase of the Project (other than the Planning Phase, for which no fees or other compensation shall be payable.


Project Costs


Owner shall invest and/or borrow such sums as are necessary to pay the Project Costs set forth in the Development Plan. Owner shall reimburse Developer for Project Costs expended by Developer, or shall make funds available to Developer for disbursement for Project Costs (including a "petty cash" fund, in an amount approved by Owner, for incidental expenditures constituting Project Costs), in each case in accordance with the Development Plan.


Project Financing


Owner may obtain mortgage financing for the Project from a lender or lenders of its choice.


Developer's Authority; No Agency


Developer shall be authorized to take such actions as it deems necessary to perform its services hereunder if and to the extent consistent with the Development Plan, except to the extent that such actions would involve a Major Decision (hereinafter defined). Developer shall perform its services hereunder as an independent contractor and shall not have any authority to contract for or bind Owner, the Property or the Project, or convey or transfer any interest in the Property or the Project. Developer shall use its best efforts to ensure that no third party develops a contrary understanding of Developer's role and scope of authority based on Developer's statements, actions or omissions. Notwithstanding the foregoing, Developer shall have the authority to represent Owner and act as its agent in obtaining building and development permits from the City of Owner, and in acknowledging receipt of deposits from buyers of Homes.


Standard of Performance


In the performance of its services hereunder, Developer shall conduct its activities in a manner which is in conformance with (i) the standard of care and quality heretofore applied by Developer in its activities, (ii) all applicable laws and regulations, and (iii) the highest business standards and ethics.


Major Decisions


As used in this Agreement, the term "Major Decisions" shall mean those decisions relating to the Project or the Property which would have a material or significant effect, or which would involve or risk deviation from the Development Plan. Major decisions require the prior written approval of Owner. By way of illustration but not limitation, the following are Major Decisions:


i. the material contents of all items to be submitted to any city, county or other governmental authority;


ii. changes in or deviation from the Development Plan;


iii. changes in or deviation from the Construction Contract or any Subcontract;


iv. changes in contracts or incurring new obligations not contained in the latest Development Plan, involving Fifty Thousand Dollars ($50,000) or more:


v. changes in approved reserves;


vi. borrowing of money in conjunction with the Property or the Project.


Termination by Either Party


Either party may terminate this Agreement by giving days prior written notice to the other party containing a detailed and, if applicable, documented explanation of the reasons therefor, under any of the following circumstances, provided that such circumstances are not cured within such period:


i. the parties are unable to agree upon a Development Plan within a stipulated time after Developer has submitted a Development Plan to Owner, or Developer has failed to submit a proposed Development Plan for more than days after the date of this Agreement, in which event no fees or compensation shall be payable to Developer;


ii. there has been a material breach of this Agreement by the other party, in which case the non-breaching party shall be entitled to recover its actual (but not consequential or punitive) damages caused by such breach; or


iii. Owner transfers all of the Property, or with respect to any Phase, such Phase, to an entity not affiliated with Owner, in which case Developer shall be entitled to retain any fees theretofore received by Developer, and in addition to receive the deferred portion of any G&A Fees payable to it, calculated on the basis of the projections of Gross Sales Price contained in the most recently revised Development Plan.


Termination by Owner


This Agreement may be terminated by Owner by providing prior written notice to Developer if any of the following shall occur and remain unchanged upon the expiration of such period:


i. there occurs or comes to light any circumstance requiring a change in the Development Plan which would have a material adverse effect on Owner's interests in the Project or the Property or on the economic feasibility of the Project;


ii. there is a cessation of construction of the Project, once commenced, except for a cessation caused by a force beyond the reasonable control of Developer such as strikes, fire, acts of God, weather, governmentally-imposed moratorium or injunction brought by a third party.


Automatic Termination


This Agreement shall terminate automatically in the event that either party shall file or have filed against them any petition in bankruptcy or any other action or proceedings under any state or federal insolvency law, unless the party against whom such action or proceeding has been filed obtains a dismissal thereof within sixty days after its filing.


Representations and Warranties


Developer warrants and represents to Owner, and Owner warrants and represents to Developer, that it has not incurred any broker's commissions, finder's fees, or any similar costs or expenses of any kind relating to the relationships created by and pursuant to this Agreement. Each of the parties shall indemnify and hold harmless the other party against any claim, loss, cost, liability or expense that the other party may incur which results from a breach of the foregoing representation.




Any notice or communication required or permitted by this Agreement shall be given in writing. Notices shall be served personally, by telecopier, or by first class mail, postage prepaid, return receipt requested, and, if mailed, shall be deemed delivered upon delivery to the sender of the return receipt. Either party may by written notification to the other party change its address for the sending of notices.


Disclosure of Contracts with Related Entities


Prior to entering into any contract, agreement, sale, purchase or understanding between Developer and an Affiliate for goods or services on behalf of the Development, Developer shall notify Owner of such fact. Owner shall have the unfettered right to reject or terminate any Subcontract with an Affiliate if Owner reasonably determines that such Affiliate is not performing or is unlikely to perform adequately and at a cost substantially equivalent to the cost that would be incurred in an arm's-length transaction.


Assignment; Successors and Assigns


This Agreement shall not be assigned by Developer without the prior written consent of Owner, which may be given or withheld in Owner's sole discretion, it being understood that Owner is relying on the particular skill and expertise of Developer in entering into this Agreement.


Attorneys' Fees


If any action is brought by either party against the other party, the prevailing party shall be entitled to recover from the other party reasonable attorneys' fees, costs and expenses incurred in connection with the prosecution or defense of such action. For purposes of this Agreement, the term "attorneys' fees" or "attorneys' fees and costs" shall mean the fees and expenses of counsel to the parties hereto, which may include printing, photostating, duplicating and other expenses, air freight charges, and fees billed for law clerks, paralegals and other persons not admitted to the bar but performing services under the supervision of an attorney.


No Third Party Beneficiaries


No person other than the parties to this Agreement and their permitted assignees may directly or indirectly rely upon or enforce the provisions of this Agreement, whether as a third party beneficiary or otherwise.


Governing Law


This Agreement shall be governed by and construed in accordance with the laws of the .


Entire Agreement


This Agreement is the entire Agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, whether oral or written, between the parties with respect to the matters contained in this Agreement. Any waiver, modification, consent or acquiescence with respect to any provision of this Agreement shall be set forth in writing and duly executed by or in behalf of the party to be bound thereby. No waiver by any party of any breach hereunder shall be deemed a waiver of any other or subsequent breach.




This Agreement shall be signed by on behalf of and by on behalf of .

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above.







By: Date:








By: Date:



Real Estate Development Agreement FAQs

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  • What would happen if I choose not to create a Property Development Agreement?

    No matter who your client is, the Real Estate Development Agreement is a document that should never be forgotten. Signing a Real Estate Development Agreement most likely will be helpful to you because of these benefits:

    • Roles and responsibilities are understood by both parties
    • There are no surprises about how long the project will last
    • Payment requirements are well-defined

    In the end, if you opt not to make this document, you might not enjoy all of the benefits and protections associated with having one in place.

  • What does a real estate development agreement template include?

    The basic details needed for making your Real Estate Development Agreement are listed below:

    • Name and address of the property owner
    • What fees will be charged and when
    • What the duration of the project is
    • What tasks you are committed to performing

    As you might hope with a contract like this, your Real Estate Development Agreement will also include the typical language about the non-employment relationship between the parties, dispute resolution, and lastly, compensation for losses. During the process of building your contract, you'll also be able to select its state of jurisdiction. With the document tool, you are able to implement additional custom editing, if needed.

  • How much might I usually pay for an attorney to write a contract for real estate development?

    Luckily, you won't need to pay hundreds of dollars to put your agreement in writing. When using Rocket Lawyer, any developer is able to make a free Real Estate Development Agreement today. Your agreement is assembled section by section, so you can be certain that it contains the proper details. Simply click the "Make document" button above to start.

    If you are having any particular doubts or concerns about how to move forward, ask a lawyer . You may also wish to browse the other business documents in our library.

  • Are there any additional steps that I should take after my Real Estate Development Agreement is drafted?

    Alongside your Real Estate Development Agreement, there will be a set of next steps to take after your document is completed. As a Rocket Lawyer member, you may edit, save it as a Word document or PDF file, print, copy, and get signatures via RocketSign® when ready. Most importantly, you will need to give a final copy of the fully signed contract to your client.

  • Would anyone review my Real Estate Development Agreement?

    If you try it by yourself, locating a legal professional to review contracts can be time-consuming and relatively expensive. Certain lawyers will not even accept requests to review contracts that they did not draft. If an attorney does decide to provide advice on your document, they most likely would still make you pay their standard fees to do so. An easier option would be through Rocket Lawyer attorney services. When you become a Premium member, you can get your contracts reviewed or ask specific questions. Whether you end up producing multiple Real Estate Development Contracts or other documents, we're by your side.

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