Builder collaboration agreement in Delhi, explained
A collaboration agreement covers 6 main terms: the floor split, the timeline, rent support, penalties for delay, possession and approvals. It should be drafted by a lawyer and registered. In Raghav Chopra's deals the owner's share depends on the floors the owner keeps, and the builder pays for the approvals.
· By Raghav Chopra, founder, in South Delhi real estate since 2010
What must the agreement include?
It should name the parties and describe the plot exactly, state the floors each side receives and their location in the building, give the construction timeline and the specification, and set out who pays for approvals.
It should also say what happens on delay, how disputes are resolved and what rights the owner keeps over the land until the building is complete.
How is the floor split decided?
The owner's share depends on the number of floors the owner chooses to keep. The more floors the owner retains, the less the builder receives to cover the build.
The split is agreed plot by plot, because the floors allowed, the colony and the builder differ. The collaboration estimator shows the terms once Raghav Chopra has confirmed them for a plot size.
What protects the owner if the builder delays?
Where the agreement has a penalty clause, the builder pays the penalty for delay, and rent support, where the deal includes it, continues until the owner's portion is handed back.
Ask for the penalty, the rent amount and the exit right to be written in, and have your lawyer check that they can be enforced.
What about registration and stamp duty?
A collaboration agreement is usually registered, and stamp duty depends on how it is structured, including how the transfer of the builder's share is documented. The rate is not the same as on a simple sale.
Ask your lawyer for the duty payable on your agreement, and budget for it before you sign.
The main terms of a collaboration agreement
| Term | What it covers | Why it matters |
|---|---|---|
| Floor split | Which floors go to the owner and which to the builder | Fixes what each side receives |
| Timeline | Date for handover of the owner's portion | Typically 18 to 24 months in Raghav's deals |
| Approvals | Who pays for and obtains them | The builder, in Raghav's deals |
| Rent support | Rent paid to the owner while the building is built | Continues if the deal includes it |
| Penalty for delay | Amount payable if the builder is late | Remedy without going to court |
| Possession | How the owner's portion is handed back | Ends the builder's rights over it |
Terms are negotiated plot by plot. Your lawyer drafts and reads the agreement.
Frequently asked questions
Does a collaboration agreement need to be registered?
In practice it is registered, because a registered agreement is easier to enforce and to show to a bank or a later buyer. Your lawyer advises on what is required for the structure you choose, and on the stamp duty payable on it.
Who pays for approvals in a collaboration?
In Raghav Chopra's collaboration deals the builder pays for the approvals and obtains them. The agreement should say so in terms, and say who bears the cost if the plan needs to be revised, so there is no argument later.
What if the builder does not finish?
The agreement should give the owner a remedy: a penalty clause, continued rent support and, ideally, a right to terminate and recover the site. Ask your lawyer to write the right to exit clearly, and to secure the owner's rights over the land until completion.
Can I change builders mid-way?
Only if the agreement allows it. Without a clause, replacing a builder needs the builder's consent or a court order. Choose the builder carefully, ask to see completed projects and see the builders page for the checks Raghav Chopra uses.
This is general information, not legal or tax advice. Confirm with your CA or lawyer before acting.
Related reading
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