REALWorld Law

Sale and purchase

Agreements with public bodies

Is it possible to enter into specific development agreements with relevant public authorities in this country in order to facilitate a project?

Angola

Angola

Both the Private Investment Law and the Public-Private Partnerships Law aim for the execution of these types of agreements and from these regime benefits (namely tax and customs benefits) are available and may be granted.

Australia

Australia

In the case of substantial proposed developments, local authorities can require a developer to enter into development or infrastructure agreements as a condition for the issue of development and planning approvals.

These agreements often impose obligations on developers to comply with certain obligations including, for example, the making of payments, the carrying out of public works and the performance of required infrastructure works.

Belgium

Belgium

It is possible to enter into a development agreement with a relevant authority, but this is rarely done since these agreements are not easily enforceable. However, public-private partnerships have recently become more common.

The Flemish region was the first region in Belgium to provide a legal body for public-private partnerships (PPPs), with its decree on public-private partnerships of 9 July 2003. Various types of collaboration between public authorities and private partners are possible.

'Public-private joint ventures' allow the public and private partners to develop, finance, build and manage or operate a project and also jointly share the risks that the project entails. In the case of public private concessions, private parties discharge the government's responsibilities, such as the supply of roads, railway infrastructure, school buildings, police stations, prisons and libraries.

Specific legislation on economic (re)development entitles certain local authorities to sell real estate to private partners under specific conditions relating to, for example, employment, authorized activities, etc.

In the Flemish region the Decree of 25 April 2014 on Complex Projects came into force on 1 March 2015. This Decree states that, with regard to projects which are of social and spatial-strategic importance and which require an integrated permit and planning process, the complex project and possible problems can be discussed in a first phase with the public authorities. In a second phase, all alternatives relating to problems detected in the first phase can be discussed with the authorities. In a final stage, the authority will determine the chosen alternative.

Bosnia-Herzegovina

Bosnia-Herzegovina

Yes. Public-private partnerships (PPPs) have recently been introduced in the Federation of Bosnia and Herzegovina (FBiH), allowing potential investors to enter into specific development agreements with the relevant authorities to facilitate projects.

Canada

Canada

In the case of proposed developments, zoning by-law amendments, demolitions or other uses of property that require some approval or permit from local authorities, it is common that the relevant local authority will impose conditions to the issuance of such approvals or permits.

The conditions often impose requirements on developers to comply with certain obligations including, for example, the making of payments, the carrying out of public works and the performance of required infrastructure works. These obligations may be secured by a registration of a covenant on title to the property granted by the developer to the local authority.

China

China

All developers enter into specific development agreements with public authorities through the land use right grant process, under which the local Land Administration Bureau will enter into a land grant agreement with a developer, in which in return for the payment of a substantial land grant premium, the Land Administration Bureau will grant the land user land use rights for a fixed period of time. The land grant contract will specify various construction requirements and time frames, with which the developer must comply.

Developers may enter into further framework agreements with local authorities to facilitate development projects. 

Croatia

Croatia

It has recently become more common to enter into specific development agreements with public authorities to facilitate, for example, the provision of access roads, etc.

Czech Republic

Czech Republic

The current Czech legal environment is not very favourable to public-private partnerships. Although in the past it was possible to initiate some projects (eg sections of motorway, prisons, courts of justice) the regulatory framework remains fragmented and would require complex amendments.

Denmark

Denmark

It is unusual to enter into specific development agreements with public authorities to facilitate a project. If a developer wants to change the use of a property, they can cooperate with the municipal authority on the preparation of a new planning regulation for the specific area.

France

France

Development projects can be private, public, or both; in the latter case under the auspices of the Société d'Economie Mixte (company grouping private and public interests) and, more recently, in the form of PPPs (Partenariat public-privé).

The allocation of responsibilities, charges and profits relating to a project with a mix of private and public interests is subject to negotiation between the parties.

Germany

Germany

Developers often enter into agreements with the relevant public authorities. Charges may be negotiated as part of a specific agreement.

Hong Kong, SAR

Hong Kong, SAR

In the case of a substantial proposed development local authorities will usually require the developer to enter into a development agreement. In exchange for planning permission, the developer must comply with certain obligations, including, for example, making a payment or carrying out public works.

As well as imposing a payment under the development agreement, the local authority will usually require the developer to pay all of its fees. Other statutory bodies, for example, water authorities, may also require development agreements.

Hungary

Hungary

Yes. Under a development agreement the private developer normally undertakes to carry out certain public works, such as providing roads, public parking spaces, green areas etc. These would then be handed over to the public authority (normally the municipality) free of charge.

Ireland

Ireland

Yes.

Italy

Italy

Developers normally enter into development agreements with the relevant public authorities. Under a development agreement, the private developer will usually undertake to carry out certain public works, such as, for example, providing roads, parking spaces, green areas etc.

Japan

Japan

Yes.  For development on real estate owned by public entities, developers must enter into a development agreement with such public entity.

Netherlands

Netherlands

Yes, charges must be based on the Exploitation Ordinance. A new law enables municipalities to contract that any claims for third party damage will be the responsibility of the private developer.

Nigeria

Nigeria

A private investor (foreign or local) can negotiate with the government or through the relevant agency for development agreements for specific projects in Nigeria.

The Nigerian government have in recent years actively engaged and promoted development projects and infrastructures through public-private partnerships which it considers as a mechanism to stimulate economic development and growth in Nigeria. Foreign investors are specifically encouraged to invest in the country with the government at all levels with the federal and the state government establishing dedicated offices to ensure the ease of doing business in Nigeria.

The Infrastructure Concession and Regulatory Commission (ICRC) Act 2005 established the Infrastructure Concession Regulatory Commission responsible for regulating PPP processes in Nigeria.

There is the Presidential Enabling Business Environment Council (PEBEC) which was set up to focus on removing bureaucratic constraints to doing business in Nigeria and making the country an increasingly easier place to start and grow a business. Also, the Nigerian Investment Promotion Commission is charged with encouraging, promoting and regulating foreign investments in the country.

Norway

Norway

It is common for larger contractors to enter into a development agreement with the relevant public authorities to facilitate a development project. Under such an agreement a developer would normally undertake to carry out certain public works, such as building roads, providing public parking spaces and green areas, etc.

Poland

Poland

Yes. In most cases, public procurement regulations or other specific laws governing the authorities' power to enter into a contract will apply. It is also possible to carry out a development project through a public private partnership.

Portugal

Portugal

Yes. Typically, these agreements provide for the developer’s obligation of transferring certain compensations, areas or infrastructures to the municipality, such as roads, public parking places, bridges, public gardens, etc.

Romania

Romania

Yes, development agreements with the Romanian public authorities can be entered into under the applicable legislation which regulates public-private partnerships, public procurement and the provision of services.

Slovak Republic

Slovak Republic

Yes. Developers usually enter into such agreements with the public authorities to carry out certain public works, such as providing public parking spaces, green areas etc. In addition, public-private partnerships projects are also carried on.

Any conditions agreed with the authorities in relation to a development project (for example, the number of public parking spaces to be built) are normally specified in the official permits/authorizations. However, if the authorities are involved in the transaction, not only the Civil Code and special laws apply, but also binding regulations relevant to the specific territorial unit or municipality.

Spain

Spain

Yes. Under a development agreement, developers will normally undertake certain public works such as providing roads, public parking spaces, green areas, etc. Public authorities normally negotiate associated charges with the developer.

Sweden

Sweden

Yes, the parties may enter into a development agreement, with the private developer undertaking to meet certain costs relating to the development.

Thailand

Thailand

No. It is not possible to enter into specific development agreements with relevant public authorities to facilitate the project.

United Arab Emirates - Abu Dhabi

United Arab Emirates - Abu Dhabi

Within Abu Dhabi and outside the Abu Dhabi Global Market free zone

The Department of Urban Planning and Municipalities' mandate is to ensure that public and private land and infrastructure development proposals are in line with the emirate’s long-term development vision, Plan Abu Dhabi 2030 and Plan Al Ain 2030.

The Department of Urban Planning and Municipalities has a streamlined process to review development proposals. It involves:

  • Enquiry
  • Pre-Concept Stage
  • Concept Planning Review
  • Detailed Planning Review

Developers can work with the Department of Urban Planning and Municipalities during this process to facilitate their project. The Department of Urban Planning and Municipalities will work with developers in satisfying the development regulations.

Under Law No. 3 of 2015 there is also the ability for developers to subdivide land (effectively creating a form of "strata title"). Developers wishing to subdivide land in Abu Dhabi must make various applications to the Department of Municipal Affairs for approval prior to commencing any development activity or subdividing the land.

Within the Abu Dhabi Global Market free zone

It is possible to submit strata development proposals to the Relevant Authority in Abu Dhabi Global Market free zone.

United Arab Emirates - Dubai

United Arab Emirates - Dubai

No, although the consent of the Roads and Transport Authority, Dubai Electricity and Water Authority and the relevant telecommunications company will be required in order to obtain the requisite full building permit from Dubai Municipality for the construction on the land. Therefore, in practice, such public authorities will be involved in such projects but there will not be a development agreement entered into between them and the developer directly.

UK - England and Wales UK - England and Wales

UK - England and Wales

In the case of a substantial proposed development local authorities will usually require the developer to enter into a development agreement. In exchange for planning permission, the developer must comply with certain obligations, including, for example, making specified payments or carrying out public works.

As well as imposing a payment under the development agreement, the local authority will usually require the developer to pay all of its fees. Other statutory bodies, for example, water authorities, may also require development agreements.

UK - Scotland

UK - Scotland

Where a proposed development is substantial and requires planning consent, the local planning authority will usually require the developer to enter into a Section 75 (Planning) Obligation. Under this agreement, the developer is required to comply with obligations that the planning authority may impose in exchange for giving planning permission for a development. These may, for example, include payment or a requirement to carry out certain works outside the development site. The Section 75 (Planning) Obligation is registered against the title to the property.

Ukraine

Ukraine

As from 31 December 2010 cooperation between the private and public sectors has been governed by the Law of Ukraine ‘On Public-Private Partnership’. A PPP is usually involved in the construction of highways, roads, railways, runways, bridges, tunnels, metros, river and sea-ports and associated infrastructure. PPP projects became more popular in the course of the preparations for the Euro 2012 football championship. Such PPP projects were based on the Law of Ukraine ‘On the Organization and Implementation of the Final of the Euro 2012 Football Championship’, dated 19 April 2007.

On 24 May 2016, the Law of Ukraine ‘On Amendments to Certain Laws of Ukraine regarding Lifting of the Regulatory Barriers for Development of Public-Private Partnership and Stimulation of Investments in Ukraine’ entered into force. The aforesaid law broadened the list of privileges and guarantees for private partners (eg now the private partners can acquire into their ownership the objects created by them in course of PPP; the objects of PPP can also be in joint ownership of the public and private partners; disputes arising out of agreements on PPP concluded with participation of non-residents can be resolved by an international arbitral tribunal; in case of early termination of an agreement on PPP through fault of the public partner, he is obliged to compensate the private partner investments non-reimbursed within the term of such agreement and damages occurred due to early termination of the agreement on PPP).

On 3 October 2019 the Law of Ukraine ‘On Concession’ (Law 155-IX) entered into force. According to Law 155-IX, private investors under the right of concession can benefit from the public-owned property, including the property prohibited to privatize: roads, railways, seaport and airdrome facilities etc. After investments in the object of concession are made investors under the concession agreement can receive revenue and other benefits from utilizing this object of concession for less than 50 years.

On 17 December 2020, the Verkhovna Rada of Ukraine adopted the Law of Ukraine On state support of investment projects with significant investments in Ukraine. According to this Law, investors who intend to invest not less than EUR20 million in Ukraine are able to execute a special investment agreement with the Cabinet of Ministers of Ukraine. Please note that investment projects shall concern construction, modernization, technical and/or technological re-equipment of investment objects in the particular spheres (processing industry, transport industry, post industry etc.) and meet other requirements provided for by the Law.

According to the respective Law, an investor may be entitled to obtain lease title to land plot for construction of investment object under the simplified procedure. The goverment of Ukraine guarantees to support the investor on each step of an investment project under the special investment agreement. In practice it is also possible to enter into investment agreements, joint venture agreements, etc with public authorities.

United States

United States

When a real estate development is proposed to be constructed upon real estate owned by a governmental entity such as a city, county or redevelopment agency, the governmental entity typically will require that the developer enter into a development or redevelopment agreement that governs the conveyance (or ground lease) of the real estate, payment of any consideration and construction of the development according to local entitlements and approvals as well as local codes and ordinances.

The redevelopment agreement will often deal with financial incentives provided by the governmental body for the benefit of the development (eg tax increment financing, governmental loans or guarantees), impose requirements on the developer such as minority/women owned business contracting requirements and set forth governmental process for zoning and plan approvals and issuance of development permits.

Zimbabwe

Zimbabwe

Yes. The government in Zimbabwe is keen to promote foreign investment into the country and has put measures into place in this respect. Provision is made for public-private partnerships with the government to facilitate projects, especially where the project is aimed at the betterment of the country as a whole. Advice is this regard may be sought with detailed information on the types of public-private partnerships that may be engaged.