Real Estate Terms Dictionary

Development Rights

Definition of 'Development Rights'

Development rights are unused rights that allow developers to make changes to their property within the limitations imposed by state or local law. An example of development rights are air rights.

What are Development Rights:

Development rights can add value to a property, as they underscore the development potential of that property.

A special type of development rights is represented by the Transferable Development Rights, which can compensate owners for not being allowed to develop certain properties because of legal limitations. By allowing the transfer of rights, the government tries to leave certain areas undeveloped while encouraging the rehabilitation of others.

For example, if for preservation reasons (cultural or historic) a property owner is prohibited from building more on a property, he or she can be given development rights elsewhere, where development is encouraged. The owner can sell these rights to a developer from the new area, being, thus, compensated for not being able to develop his or her own property.


Here's a real-life example from one of the properties researched on PropertyShark:

Development rights - example


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The glossary is intended to provide real estate professionals and home buyers with a basic understanding of various specialized terms related to legal rights over a property. All terms appear in public records such as ACRIS. We do not take responsibility for the legal accuracy of the definitions provided and ask that use of these explanations in a legal setting be made only after checking with a lawyer or another specialist in the field.