A master developer may be responsible for a large real estate development while allocating a particular parcel, phase or component to a sub-developer with specialised development, financing or execution capabilities.
However, appointing a sub-developer does more than divide the workload. It creates a contractual interface involving authority, project costs, risk, programme, quality, contractors and responsibility for delay.
A carefully drafted master developer and sub-developer agreement should therefore allocate both responsibilities and risks before project implementation begins.
What Is a Master Developer and Sub-Developer Arrangement?
The master developer is generally responsible for the overall development concept, master plan and coordination of the wider project, while a sub-developer develops a defined parcel, phase or component under an agreement with the master developer.
Depending on the project, a sub-developer may be responsible for residential, commercial, hospitality, infrastructure or other defined development elements.
Important: Dividing the development scope does not automatically divide legal responsibility. The agreement should clearly establish who controls each decision, who bears each cost and who is responsible for the consequences of default or delay.
