Format Agreement for Investment in a Construction Project

This is a format of Agreement. Owner of a plot of land is developing a construction project on the said land. For raising fund for the project the Owner-cum-Developer offers third party to invest into the project. The Investor being interested invests into the said project on conditions, inter alia, that a part of the said project shall be transferred by the Owner-cum-Developer to the Investor upon completion of construction and others of the said part of the project. Format for the said Agreement is given below. A link to download the format in PDF version for free is given below after the format.


FORMAT OF THE AGREEMENT

1. Date:
2. Place:
3. Parties:
3.1 _______________, a Company within the meaning of Companies Act, 1956, having its Registered Office at _____________________.
(Developer, includes successors-in-interest and assigns)
AND
3.2 _______________, a Company within the meaning of Companies Act, 1956, having its Registered Office at _____________________. 
(Investor, includes successors-in-interest and/or assigns)
[Developer, Investor collectively Parties and individually Party.]

NOW THIS AGREEMENT WITNESSES, RECORDS, GOVERNS AND BINDS THE CONTRACTUAL RELATIONSHIP BETWEEN THE PARTIES AS FOLLOWS:

4. Date of Commencement: This Agreement shall commence and/or shall be deemed to have commenced on and with effect from ____________ (DOC).

5. Background:

5.1 Said Land: The Developer is the sole and absolute owner of or otherwise well and sufficiently entitled to ALL THAT a piece and parcel of landed property measuring about ________ be the same a little more or less lying and situate at _____________________, described in the 1st Schedule below (Said Land).
5.2 Said Project: The Developer became desirous of commercially exploiting Said Land by way of developing it, constructing several multi-storied buildings thereon in several blocks and causing other incidental works thereto (Said Project) and with an ultimate scheme of selling different residential flats, car parking spaces and others (collectively Units) in the said buildings to the prospective buyers thereof.
5.3 Said Plan: For Said Project as aforesaid the Developer got prepared a building plan and caused the same duly sanctioned by the appropriate authority, i.e. _____________, vide ____________ (Said Plan). Thereafter the Developer has started construction of the said buildings on Said Land in accordance with Said Plan.
5.4 Offer to the Investor: The Developer, in course of progress of Said Project as per its business scheme, offered a proposal to the Investor for investing a sum stated hereinafter into Said Project on suitable terms and conditions for both the parties and made some representations mentioned below in support of the said proposal. On the basis of and believing in the representations of the Developer, the Investor having accepted the said proposal of the Developer agreed to make an investment as stated hereinafter into Said Project.

6. Representations and Warranties of the Developer:

6.1 Marketable Title of Said Land: The Developer is the absolute owner of the Said Land and no other person has any right, title or interest on and over thereof. The Said Land is also free from all claims, demands, encumbrances, mortgages, charges, liens, attachments, lis pendens, uses, easements, trusts, prohibitions, court proceedings either in execution or pending, revenue recovery proceedings, wealth tax, Income tax dues, Income tax attachment, Financial Institution charges, claims and liabilities whatsoever or howsoever, made or suffered by the Said Land or any person or persons having or lawfully, rightfully or equitably claiming any estate or interest therein through under or in trust for the Developer or the Developer’s Predecessors-in-title. The Developer undertakes that it shall indemnify the Investor against any loss or damages that may take place due to the defective title to Said Land or any part/portion thereof and/or for any encumbrances thereto.
6.2 No Prejudicial Act by the Developer: The Developer has not any time done or executed or knowingly suffered or been party or privy to any act, deed, matter, or thing whereby the Said Land or any part thereof can or may be impeached, encumbered or affected in title.
6.3 Compliance with Local Laws: The Developer has fully complied with all the applicable local laws in respect of the Said land and the Said Project is not in violation of any laws including but not limited to local and other laws.
6.4 No Acquisition or Requisition: The Developer has no knowledge of any notice from any authority for acquisition or requisition and declares that the Said Land is not affected by any scheme of the Government or Statutory Body.
6.5 No Notification: No part or portion of the Said Land has been (i) notified/planned for any development scheme of the Government or any Statutory Body and/or (ii) vested in the State by operation of law.
6.6 No Litigation: No part or portion of the Said Land is affected by any pending proceeding, civil, criminal or revenue and thus the Said Land is not affected by the doctrine of lis pendens or any prohibitory order or any mandatory order.
6.7 The Developer has Good Right: Notwithstanding any act, deed or thing whatsoever done as aforesaid, the Developer has good right, full power, absolute authority and indefeasible title to enter into this Agreement in the manner specified herein, according to the true intent and meaning of these presents.
6.8 Capability of the Developer: The Developer has sufficient expertise, knowledge, funds and resources to undertake the development of Said Land and complete the Said Project and meet all the requirements of the statutory authorities and obtain completion certificate and certificate of fitness/occupancy and that the Developer is also otherwise eligible to enter into this Agreement with the Investor.

7. Basic Understanding:

7.1 Approach by Developer: The Developer has approached the Investor and has offered to invest the sum stated below into Said Project as aforesaid.
7.2 Reliance on Representations: Relying on the aforesaid representations and warranties of the Developer and for the gain as stated in the Consideration below the Investor has agreed to invest the sum stated below into Said Project in the manner as specified below.
7.3 Discussions and Negotiations: Discussions and negotiations have taken place between the Developer and the Investor and essential terms and conditions in this regard have been finalized.
7.4 Agreement: Pursuant to such discussions and negotiations, conclusive and comprehensive terms and conditions superseding all previous documents and understandings, if any, are now being recorded by this Agreement.

8. The Scheme of the Investment & the Return:

8.1 The Investor shall invest the sum as stated below with the Said Project of the Developer.
8.2 In consideration of the said Investment (defined below) the Developer shall assign and/or transfer the total constructed area comprising of several units in the two buildings being Nos. ___________ in Block _______ in the Said Project (Subject Property), described in the 2nd Schedule below, in favour of the Investor and/or its nominee/s or assignee/s within the stipulated time stated below. The Subject property includes but not limited to the units in the said two buildings, Car parking spaces therein or provided therefor, undivided impartible proportionate share in the Said Land as be attributable to the Subject Property, undivided impartible proportionate share in the Common Spaces and facilities as be attributable to the Subject Property, benefits of Said Plan, if any.
8.3 The Investor shall be entitled to enter into Agreement/s for Sale with the prospective buyers of the different units in the Subject Property from the DOC and take booking or advance money directly from them by virtue of this Agreement.
8.4 Furthermore said prospective buyers shall be also entitled to take loans and/or finance from any bank or financial authority for purchasing their respective unit/s in the Subject Property.
8.5 The Investor shall be at liberty to fix any price for selling the said units in the Subject Property to the intending purchaser/s thereof and the Developer shall have no objection in this regard.
8.6 The Investor shall at its discretion appoint any broker for finding out such buyers and/or issue notice/advertisements publicly; the Developer doth hereby consent to the same.
8.7 The Developer shall be made party to necessary Deed/s of Conveyance in respect of such units in favour of such prospective buyers and at the request of the Investor shall execute said Deed/s of Conveyance and cause registration thereof without charging any extra fee for that.

9. Investment:

9.1 Total Investment: A consolidated sum of Rs.___________/- (Rupees ____________________) only (Investment) is to be invested by the Investor as agreed by and between the parties hereto. Save and except the Investment the Investor shall not be liable to pay any further amount to the Developer and/or any person or persons claiming through or under it in any manner whatsoever.
9.2 Payment of Investment: The Investor shall make payment of the Investment specifically in the manner as described in the 3rd Schedule (Payment Schedule) below. It is clarified here that as per the instruction of the Developer and/or in terms of mutual arrangement between the parties hereto from time to time, the Investor may make payment of any installment amount or any part thereof directly to the supplier of any material for construction in respect of only the said two buildings or incidental thereto and that shall be treated as the payment to the Developer. However, in any circumstances the Investor shall not be bound to pay any extra amount beyond the terms of the Payment Schedule.

10. Consideration in this Agreement: 

10.1 The Developer: The Developer is taking and utilizing the Investment made by the Investor.
10.2 The Investor: The Investor is becoming entitled to own and/or take transfer of the total constructed area of the Subject Property together with the rights of the common facilities and/or the benefits of the Said Plan in its favour and/or in favour of its nominee/s or assignee/s.

11. Stipulated time: The Developer shall complete in all respect and hand over to the Investor the Subject Property in full habitable condition together with the Common facilities appurtenant to the Said project as attributable to the Subject Property within __________ from the DOC without any default (Stipulated Time), subject to (i) timely payment by the Investor as per the Payment Schedule and (ii) Force Majeure, described below.

12. Force Majeure: ‘Force Majeure’ shall mean and include flood, earthquake, riots, war, tempest, civil commotion.

13. Developer’s Obligations:

13.1 Construction: The Developer shall develop the Said Project and construct the Subject Property with its sole responsibility in accordance with the Said plan in good workmanlike manner and as per the agreed specification, an indicative but not exhaustive list whereof is given in the 4th Schedule below.
13.2 Mortgage etc.: Save and except the Prospective buyers of the different units taking financial assistance from any bank or financial institutions for the purpose of purchasing any unit or units in the Said Project, the Developer shall keep the Said Land and the Subject Property saved from any charges, liens etc. or any sort of encumbrances.
13.3 No Agreement: The Developer shall not enter into any further agreement with any party in respect of the Subject Property from DOC.
13.4 Notice to Investor: Upon completion of the construction of the Subject Property in all respect as specifically stated herein the Developer shall issue a notice upon the Investor to take possession and transfer of the Subject Property and from the _____th day of service of such notice it will be presumed that the Investor has taken possession thereof (Possession Date).
13.5 Execution & Registration: The Developer shall execute and cause registration of necessary Deed or Deeds of Conveyance in favour of the Investor or its nominee/s or assignee/s in respect of the Subject property without charging any extra fee therefor. Deed/s in respect of all the Units in the Subject property may not be registered at the same time also.
13.6 Indemnification: The Developer undertakes to indemnify and agrees to keep the Investor saved, harmless and indemnified about all its activities under Said Project and/or within the purview of this Agreement, including but not limited to the correctness of the title of Said Land including the Said Land, Subject Property, construction of the New Buildings in accordance with Said Plan, qualities of the materials, specification, disputes arising out of the deviation in construction from Said Plan and/or for the violation of any applicable laws or rules and/or any agreement entered into by the Developer with any third party or parties in respect of the Said Project and/or the Subject Property.
13.7 Outgoings: All taxes, revenue, levy, impost and outgoings of any nature whatsoever with regard to the Said Land and/or Said Project shall be borne and paid by the Developer and/or any person or persons claiming through or under it. From the Possession Date the Investor and/or any person/s claiming through or under it shall make payment of all taxes, revenue, levy, impost and outgoings of any nature whatsoever in respect of the Subject Property in full and proportionate share in respect of the common charges or expenses.

14. Investor’s Obligations:

14.1 Timely Payment: The Investor shall make payment of the Investment amount and in the manner as specified in the Payment Schedule below.
14.2 No Interference: The Investor shall not in any way interfere with and/or cause obstruction in the construction or development of Said Project. However by virtue of this Agreement the Investor through its duly authorized agent/s shall be entitled to enter into the Said Land to inspect and verify the progress of the Said Project from time to time.
14.3 Outgoings: From the Possession Date the Investor and/or any person/s claiming through or under it shall make payment of all taxes, revenue, levy, impost and outgoings of any nature whatsoever in respect of the Subject Property in full and proportionate share in respect of the common charges or expenses.
14.4 To abide by: The Investor and/or any person or persons claiming though or under it shall abide by all the rule and regulations of Association of Owners’ as may be formed or any bye-laws thereof for time being in force. 

15. Consequences of Breach: 

15.1 Of Developer: (a) In the event of the Developer committing breach of performance of any of its obligations contained herein, the Investor shall be entitled to enforce specific performance of this Agreement. (b) In case the Developer shall fail to make delivery of Subject Property fully completed in all respect as aforesaid within the Stipulated Time, upon consent of the Investor in writing time for such delivery may be extended for a further period as may be mutually agreed subject to a maximum of ___ months. The Developer shall pay to the Investor an amount at the rate of ____% on the Investment to the Investor for the said extended period towards compensation.
15.2 Of Investor: In case of any default by the Investor in making payment of the Investment amount as per the Payment Schedule the Developer shall be entitled to an extra amount at the rate of ___% on the defaulted amount till realization thereof. In the event of default in making payment of three consecutive installments, the Developer shall be entitled to terminate the Agreement after giving 15 days time in writing to the Investor to make payment thereof. In case of termination the Developer shall forthwith refund to the Investor the entire amount received from it till that date.
15.3 Savings: However the parties, as the case may be, shall not be considered to be in breach of any obligation herein to the extent that the performance of the relevant obligation is prevented by the existence of force majeure condition with a view that the obligation of the party affected shall be suspended for the duration of the force majeure condition.

16. Miscellaneous:

16.1 Revocation of Previous Understanding: This Agreement is the only contract and understanding between the Parties. All previous discussions and writings, if any, stand revoked and replaces by this Agreement. The provisions of this Agreement shall remain binding upon the Parties unless modified in writing by bilateral instruments.
16.2 Language: All documents to be furnished or communications to be given or made under this Agreement shall be in English Language.
16.3 Character of the Agreement: The Investor and the Developer have entered into this Agreement purely on principal to principal basis and nothing stated herein shall be deemed or construed as a partnership between the Developer and the Investor in any manner nor will it constitute an association of persons.
16.4 Custody of Agreement: This Agreement is made in duplicate and one each of the same duly signed by all the parties shall remain in custody of each of the parties.

17. Notice:

17.1 Mode of Service: Except as otherwise expressly provided herein, all notices shall be in writing and shall be transmitted by pre-paid Registered Post at the addresses of the Parties mentioned hereinbefore.
17.2 Change of Address: Either Party may from time to time change its address for receipt of notice or other communications provided for in this Agreement by giving to the other not less than 10 (ten) days prior written notice.

18. Jurisdiction: The Courts at ______ shall have the exclusive jurisdiction to entertain and consider all actions, suits and proceedings arising out of this Agreement.

19. Interpretation:

19.1 Number: Words denoting the singular number include, where the context permits and requires, the plural number and vice-versa.
19.2 Headings: The headings in this Agreement are inserted for convenience only and shall be ignored in construing the provisions of this Agreement.
19.3 Definitions: Words and phrases have been defined in this Agreement by bold print and by putting them within brackets. Where a word or phrase is defined, other parts of speech or grammatical forms of that word or phrase shall have corresponding meaning.

1st Schedule
(Said Land)
Detail description of the Said Land…………………


2nd Schedule
(Subject Property)

Detail description of the said two buildings…………. Their numbers (or any other identification with location), block, total constructed area, total super built up area, number of units, their characters, common facilities, other benefits of Said Plan, …….. etc.
The master plan may be attached as annexure…..

3rd Schedule
(Payment Schedule)



4th Schedule
(Specification)
This shall be an indicative list………….


20. Execution and Delivery:
20.1 In Witness Whereof the Parties have executed and delivered this Agreement on the date mentioned above.






____________________ 
      [DEVELOPER]

____________________
     [INVESTOR]

Witnesses:

1. Signature: _________________________
Name:
Father’s/Husband’s Name:
Address: 


2. Signature: _________________________
Name:
Father’s/Husband’s Name:
Address:
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