At a glance
In a construction partnership agreement, the landowner and the developer agree that the developer will build with its own capital and expertise and the finished units will be divided in an agreed ratio. The quality of the contract depends on clarity about shares, timeline, technical specifications, guarantees and remedies for delay.
Essential clauses
- Precise details of the property, its registration number and title status
- Each party's share and how units are allocated
- Technical specifications, materials and attached drawings
- Timeline for permits, demolition, structure and handover
- A daily delay penalty and how it is calculated
- The developer's guarantees and when they are released
- Staged transfer of the developer's share in line with physical progress
- Costs and charges for each party, insurance and site safety
- Termination and dispute resolution (ideally specialist arbitration)
Main risks for the landowner
Project stoppage, unlicensed pre-sales by the developer, poor build quality and premature transfer of the developer's share are the owner's main risks. The contract should tie share transfers to real progress and make pre-sales subject to clear conditions.
Main risks for the developer
Delays by the owner in vacating or handing over documents, inheritance disputes or title problems, and the owner changing their mind mid-project all threaten the developer's capital. The owner's obligations must be written as carefully as the developer's.
Frequently asked questions
A private agreement is binding between the parties, but an official deed — or an obligation to sign one — gives stronger legal protection and prevents conflicting transactions.
It is up to the parties, but it should be large enough to create a real incentive to deliver on time; it is often based on the rental value of the units or the value of the property.
The contract should already set out termination, what happens to the completed part and forfeiture of guarantees. Otherwise, the owner faces lengthy litigation.