Timely Contract® - Real Property, Real Solutions® - logo

Sale of Development Rights Agreements

by | Jan 17, 2019

It’s never been easier or faster to get help from an experienced real estate attorney: 
Click here to get a real estate contract or document reviewed.
Click here to get a real estate contract or document drafted.

Developer’s rights, similar to mineral rights or water rights, represent part of the value of a piece of property. The right to develop a property generally makes that property more valuable. So, when owners agree to NOT develop a property, they’re typically compensated for the loss of their development rights. This agreement is known as a “development rights” agreement.

Purchase Of Development Rights
Typically, the sale or purchase of development rights is used to permanently protect a productive, sensitive, or aesthetic landscape – while allowing the owner of the property to still own it and manage it. Local governments will often purchase development rights in order to preserve farmland, forests, view corridors, or other types of open space, while still leaving the land in private ownership.

Transferable Development Rights
Transferable development rights are another mechanism for compensating owners for not being able to develop their own properties. A local government might want to preserve certain areas (prohibiting property owners from developing the land) and will give property owners development rights somewhere else – as compensation for the rights they’ve given up.

Valuing Development Rights
When it comes to valuing development rights, on the most basic level, they’re appraised at the difference between what the land is worth WITH the rights and WITHOUT the rights. As an example, if you own agricultural land that could be sold for $20,000 per acre for home sites, but is only worth $5,000 per acre if it were restricted to agricultural use only by an easement, the development rights would be worth $15,000 per acre.

Have A Real Estate Attorney Draft Or Review Your Development Rights Agreement
As with the transfer of any rights associated with a property, it’s critical that the rights are transferred properly – through a well-written, enforceable development rights agreement. If you’re considering selling the development rights to a property you own, we can draft a development rights agreement for you! And if you’re considering purchasing a property that has an easement restricting its development rights, we can review that development rights agreement for you!

At Timely Contract, we have local real estate attorneys who have experience throughout Idaho, including: Boise, Post Falls, Coeur d’Alene, Lewiston, Moscow, and Sandpoint.

We also have local real estate attorneys who have experience throughout Montana, including: Missoula, Billings, Bozeman, and Kalispell.

Types of Real Estate Contracts

There are many types of RE contracts available to buyers and sellers. We’ve compiled the Top 40 for your review!

Real Estate Glossary

From A to Z, we’ve compiled over 310 real estate terms!
Skip to content