This note, prepared by the London office (Holborn Gate, 330 High Holborn, London, WC1V 7QH), outlines common legal themes that arise in development projects in Bangladesh. It is intended for international investors, funders, landowners and developers who require a high-level understanding of regulatory drivers, contractual risk allocation and practical pre-contract steps. It is not a substitute for local legal advice.

Overview of the regulatory framework

Bangladesh’s real estate sector is governed by a combination of statute, administrative regulation and land administration practice. Key statutory instruments establish developer registration, consumer protections for purchasers of off‑plan units and statutory processes for land transfer. Local government and land administration offices apply these requirements in practice, and approvals are typically required from several authorities (municipal or city corporations, building control authorities, and utility providers).

Key rights and liabilities for landowners and developers

Common contractual and legal issues include:

• Allocation of title risk: ensuring that the landowner has marketable title and that any encumbrances, mortgages or competing claims are identified and addressed.
• Transfer of development rights and scope of works: clarity on the mechanics of land use change, allotment of floors/units to the landowner, and timing of transfers.
• Regulatory compliance: developer obligations to obtain planning permission, building permits, and statutory registrations before marketing or physical construction.
• Consumer protection and pre‑sale liabilities: protections for apartment purchasers can create strict liability for developers for defects and delays.
• Financial risks: funding arrangements, security (mortgages, charges), escrow and payment waterfalls to protect purchasers and finance providers.
• Contractual remedies and termination rights: clear events of default, liquidated damages, and dispute resolution mechanisms where litigation and arbitration may both be used.

Practical due diligence and contractual issues — checklist

Before concluding co‑development or sale agreements, consider this checklist:

1. Title chain review and search for encumbrances, caveats and pending litigation at the relevant land registry and deputy commissioner’s office.
2. Confirm zoning, planning permissions and likely timelines for necessary statutory consents.
3. Verify developer registration and compliance with any statutory registration scheme applicable to housing developers.
4. Draft detailed development agreements: scope, milestones, allocation of units, payment schedule, retention/escrow provisions and mechanisms for resolving defects.
5. Consider security for payment: performance bonds, guarantees, and properly registered charges for lenders.
6. Tax and foreign exchange review: stamp duty, VAT implications, and repatriation controls relevant to cross‑border investors.
7. Prepare dispute-management clauses: escalation, expert determination, arbitration seat, and enforcement considerations.

Common disputes and risk allocation

Disputes frequently arise from title defects, delay in obtaining approvals, defective construction, and disagreements over the interpretation of allocation provisions in co‑development agreements. International parties should pay particular attention to the enforceability of security and the practicalities of executing remedies locally (eg, enforcement of foreign judgments and arbitral awards).

Jurisdiction and sources

Primary official sources for legislation and administrative guidance include:

• Parliament of the People’s Republic of Bangladesh (acts and statutory instruments)
• Ministry of Housing and Public Works, Government of Bangladesh
• Office of the Deputy Commissioner / Local land administration authorities
• National Board of Revenue (tax legislation and guidance)
• Bangladesh Bank (foreign exchange and remittance regulations)

General information only; not legal advice and not a substitute for advice on a particular matter.