Legal Issues in Real Estate Projects: Developer vs Landowners

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Legal Issue in Real Estate Project in Bangladesh

One of the major factors boosting our GDP is the construction industry. In addition, it has grown to be quite profitable for landowners in metropolitan areas to co-develop land with developer firms. This not only provides the landowners with a sizable sum of money upfront but also enables them to develop the area without having to invest any money. 

Landowners may skip conducting the necessary due diligence on developer businesses because the transaction is too alluring, while new developer companies looking to make a quick buck also avoid conducting the necessary due diligence on land owners. Numerous real estate businesses have been founded in this industry. They reached an understanding with the proprietor who agreed to cede the property to them.

They reached an arrangement with the landowner, who agreed to turn over the property to the real estate development company for building. The Contract Act of 1872 and any applicable legislation created by the government of Bangladesh for this subject are followed in a number of contracts that have been negotiated between landowners and real estate development companies. Without sufficient legal knowledge, the landowner unknowingly encountered various issues. There are other disagreements between the parties as well. The Real Estate Development and Management Act was passed by the government in 2010 to protect landowners’ interests from developers. Additionally, the government has recently released circulars in which it was proposed that developer businesses seek REHAB registration as a requirement, therefore ensuring certain quality requirements standards.

The purpose of this article is to offer important information to landowners who enter into a building contract with a real estate developer company.

  1. Joint Venture Agreement: The Joint Venture Agreement is often the first document that the Landowner and the Developer sign after extensive discussion. This Agreement specifies the timetable, advance payment, delay, and penalty as well as the share percentages of the Developer and Landlords. A landowner is required to sign and complete this Agreement in accordance with Section 10 of The Real Estate Development and Management Act, 2010. This Agreement need not be registered in accordance with the law.
  2. Power of Attorney: Section 10 of the Real Estate Development and Management Act, 2010, stipulates that the Land Owner must additionally sign a Power of Attorney in the Developer’s favor. This will enable the Developer to sign sale agreements with third-party purchasers, submit to RAJUK/CDA for approval of the layout plan, and carry out other relevant tasks.
  3. Contract Act of 1872 formalities: Section 10 of the Contract Act of 1872, which addresses the necessary components of a legal contract, must be followed in the contract between the landowner and the real estate developer.
  4. Written contract: Land must be transferred to a real estate developer in writing with both parties’ approval and legal capacity to enter into a contract under the Contract Act of 1872, free of any fraudulent intent. Contracts must have a written statement of the terms and conditions. Include consequences for contract violations in the agreement as well.
  5. Handover Delay: Section 15 of the Real Estate Development and Management Act of 2010 addresses this issue. The land owner shall be entitled to compensation in accordance with the terms of the deed of the agreement signed by the land developer and the land owner in the event that the assigned share of the apartment or piece of land is not delivered on time. In addition, the landowner will be entitled to rental payments, which must be specified in the agreement’s deed.
  6. Landowner Delay: In accordance with Section 28 of the same Act, if the landowner delays in giving the developer control of the property as specified in the contract, they may be subject to a fine of up to Tk. 10 lac and/or a sentence of up to 2 years in jail. Additionally, in accordance with Section 29 of the 36 of The Real Estate Development and Management Act, 2010, if the Landowner revokes the Power of Attorney granted to the Developer without giving the Developer 30 days’ notice, he would be subject to a fine and/or jail.
  7. Resolution of Disputes: Section 36 of The Real Estate Development and Management Act, 2010, states that parties to a disagreement between a landowner and a developer must first seek a mutual resolution. However, if such an effort is unsuccessful, the Arbitration Act of 2001 will regulate the settlement of the dispute.
  8. Transfer of the due portion: In accordance with Section 30 of The Real Estate Development and Management Act, 2010, a land developer who fails to give the land owner possession of the due portion of real estate in accordance with the terms of the agreement they have entered into is subject to a two-year maximum sentence in prison, a fine of Tk 2,000,000, or both.
  9. Contractual Breach: Under the Specific Relief Act of 1877, the landowner may sue the development business for the specific execution of the contract in order to take ownership of the assigned apartment or piece of land. The registration authority of the development company and the developer firm may both be included as respondents to the writ petition when the landowner sues the Ministry of Commerce under Article 102 of the Constitution.


To prevent future disputes, it is essential that both landowners and developers carefully examine the developer agreement’s conditions. Special care must be given to any potential delays in the handover of such projects since doing so might subject the developers to legal liability. Additionally, landowners need to be cautious of offers that are overly attractive or out of line with what the market is offering.


Purchasing, selling, registering, and transferring real estate.


When it comes to real estate, there are a lot of things you need to watch out for. If you don’t follow Bangladesh’s real estate laws, you could face serious penalties. This makes it even more important to understand all of the rules and laws.




The prospectus or allotment paperwork must include the proper justification or analysis, as well as the division of the real estate’s salable area.

The agreement reached between the parties must include a thorough description of all conditions pertaining to the development and sale of real estate.

With the buyer’s permission, a developer may alter the designated plot or apartment if they so want.

No developer may demand extra payment from the customer in derogation of the terms of the contract (However, this provision shall not come into force if either party executes a supplementary agreement proposing the addition of any advanced equipment by mutual consent).




The developer must transfer ownership of the property, complete the registration procedure, and provide the buyer with all necessary paperwork within three (three) months after receiving the entire purchase price.

Adjustments must be made within 3 (three) months in accordance with the price at which the real estate was bought if its value changes at the time of transfer of possession.

Developers may conduct the sale or transfer of the real estate obtained on their behalf by executing or drafting the deed themselves when they purchase land from a landowner or a power of attorney with the intention of building a real estate on it and selling it to the real estate buyers thereof.

When the real estate is prepared to be sold or transferred, the developer must submit a written request if the developer is not given the authority to do so as per subsection. 

A deed in favor of the buyer must be prepared by the landowner or by his representative within 15 (fifteen) days after the request.

The developer shall be given the authority to prepare the deed as if the developer himself is the owner of the land and real estate, regardless of any existing customary law, if the deed is not executed within the allotted time by the landowner or on his behalf after being requested by the developer under subsection.

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