A Development Agreement Irrevocable Power of Attorney (DAIPA) is a legal document that grants the developer an irrevocable power of attorney for the development of a specific property. This means that the developer has complete authority to develop the property as desired, and the property owner cannot revoke this power. The developer can sign documents, make financial decisions, and take other actions related to the project.
This type of agreement is generally used in real estate development projects where a property owner wants to ensure that the development proceeds as planned. The DAIPA gives the developer the authority to make decisions on behalf of the property owner without needing to obtain prior approval for each action.
However, it’s important for property owners to carefully consider the implications of entering into a DAIPA. While it can offer some benefits, such as streamlining the development process, it also gives the developer significant power. If the developer makes decisions that negatively impact the project or the property owner, there may be little that the property owner can do to stop them.
Therefore, property owners should work with an experienced attorney to ensure that they fully understand the implications of a DAIPA before entering into it. They should also carefully negotiate the terms of the agreement to ensure that their interests are protected.
Some key considerations for property owners when negotiating a DAIPA include:
1. Scope and duration of the power of attorney: The DAIPA should clearly define the scope of the developer’s authority and the duration of the agreement. The property owner should ensure that the agreement is only in effect for the duration of the development project and that the developer’s power is limited to actions related to the project.
2. Limits on developer’s authority: The DAIPA should specify any limits on the developer’s authority. For example, the property owner may want to limit the developer’s ability to change the plans for the project without prior approval.
3. Compensation and expenses: The DAIPA should include provisions for compensation and expenses. The property owner should negotiate a fair compensation for the developer’s services and ensure that the agreement specifies who will pay for expenses related to the project.
4. Termination and dispute resolution: The DAIPA should specify the circumstances under which the agreement can be terminated and the process for resolving any disputes that arise.
Overall, a DAIPA can be a useful tool for property owners in real estate development projects. However, it’s important to approach such agreements with caution and to work with a knowledgeable attorney to ensure that the terms of the agreement protect the property owner’s interests.
