Document:

EXHIBIT 10.16.04
                        DESIGN AND DEVELOPMENT AGREEMENT

         This  Agreement  made as of the 25th day of June 1998,  by and  between
ROBERTS  PROPERTIES  RESIDENTIAL,  L.P.,  a  Georgia  limited  partnership  (the
"Partnership"),  and  ROBERTS  PROPERTIES,  INC.,  a  Georgia  corporation  (the
"Developer"),

                              W I T N E S S E T H:

         WHEREAS, the Partnership has acquired  approximately 35.3 acres of land
at the intersection of Old Norcross Road and Herrington Road in Atlanta, Georgia
(the "Property") as described in the 1998 Form 10-K of Roberts Realty Investors,
Inc., (the "10-K"), and the Partnership intends to develop,  construct,  own and
operate  on the  Property  a 249 unit  garden-style  apartment  community  ("Old
Norcross"); and

         WHEREAS,  the  Partnership  desires that the Developer  perform certain
advisory,  administrative and supervisory services relating to the Partnership's
design, development and construction of Old Norcross;

         NOW, THEREFORE, the parties hereto hereby agree as follows:

                                       1.

                                    Services

         The Developer  will create and develop Old Norcross and manage the team
of professionals involved,  including engineers,  land planners,  architects and
designers, and manage the design team involved in developing the interior design
and models,  as well as selecting the materials,  finishes,  features and colors
for Old  Norcross.  The  Developer  shall also provide  supervisory  services to
ensure that Old  Norcross is built in  accordance  with the  approved  Plans and
Specifications provided.

                                       2.

                                  Compensation

         For the  above  services,  the  Developer  shall be paid a total of One
Million Two Hundred  Forty-Five  Thousand  Dollars  ($1,245,000),  payable  upon
demand by the Developer.

         IN WITNESS WHEREOF,  the parties hereto have executed this agreement as
of the date first above written.

ROBERTS PROPERTIES RESIDENTIAL,          ROBERTS PROPERTIES, INC., a
L.P., a Georgia limited partnership      Georgia corporation

By:  Roberts Realty Investors, Inc.,     By: /s/ Charles S. Roberts
        its General Partner                  -----------------------------------
                                                 Charles S. Roberts, President

By: /s/ Charles R. Elliott
    -------------------------------------------
    Charles R. Elliott, Chief Financial OfficerEXHIBIT 10.16.05

                      THE AMERICAN INSTITUTE OF ARCHITECTS

       ------------------------------------------------------------------
                             AIA DOCUMENT A117-1987

                      Abbreviated Form of Agreement Between

                              Owner and Contractor

                                       for

                     CONSTRUCTION PROJECTS OF LIMITED SCOPE

                        where the basis of payment is the

                           COST OF THE WORK PLUS A FEE

                   with or without a Guaranteed Maximum Price

                                  1987 EDITION

THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES; CONSULTATION WITH AN ATTORNEY IS
ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION.

This document  includes  abbreviated  General  Conditions and should not be used
with  other  general  conditions.
It has  been  approved  and  endorsed  by The Associated General Contractors of
America.

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AGREEMENT

made as of the   15th day of     August in the year of
Nineteen Hundred and Ninety-Eight.

BETWEEN the Owner:                  Roberts Properties Residential, L.P.
(Name and address)                  8010 Roswell Road, Suite 120
                                    Atlanta, Georgia  30350

and the Contractor:                 Roberts Properties Construction, Inc.
(Name and address)                  8010 Roswell Road, Suite 120
                                    Atlanta, Georgia  30350

The Project is:                     Old Norcross Apartments
(Name and location)                 Old Norcross & Herrington Roads
                                    Norcross, Georgia  30044

The Architect is:                   The Preston Phillips Partnership, Inc.
(Name and address)                  9000 Central Park West
                                    Suite 100
                                    Atlanta, Georgia  30328

The Owner and Contractor agree as set forth below.

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Copyright 1979, (C)1987 by The American  Institute of Architects,  1735 New York
Avenue, N.W., Washington, D.C. 20006. Portions of this document are derived from
AIA  Documents  A111,  Standard Form of Agreement  Between Owner and  Contractor
where the basis of  payment  is the Cost of the Work Plus a Fee,  copyright  (C)
1987 and  earlier  years,  and AIA  Document  A201,  General  Conditions  of the
Contract for Construction,  copyright (C)1987 and earlier years. Reproduction of
the material herein or substantial  quotation of its provisions  without written
permission of the AIA violates the copyright  laws of the United States and will
be subject to legal prosecution.
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<PAGE>

                                    ARTICLE 1

                            THE WORK OF THIS CONTRACT

1.1 The  Contractor  shall  execute the entire Work  described  in the  Contract
Documents, except to the extent specifically indicated in the Contract Documents
to be the responsibility of others, or as follows:

All site clearing,  grading, utilities,  paving, curb and gutters,  landscaping,
etc.  associated  with the  construction of 249 total one, two, or three bedroom
units,  swimming pool,  maintenance/car  wash building and trash compactor.  The
property consists of approximately  35.325 acres of land located in Land lots 38
and 41 of the  7th  District  of  Gwinnett  County,  Georgia.  Project  is to be
constructed  in  accordance  with  the  approved  Plans &  Specifications  to be
prepared by The Preston Phillips Partnership, Inc.

Any adverse soil  conditions  that may be encountered  are included in this Cost
Plus Contract;  any costs associated with those conditions shall be borne by the
Owner.

                                    ARTICLE 2

                           RELATIONSHIP OF THE PARTIES

2.1 The Contractor accepts the relationship of trust and confidence  established
by this  Agreement and covenants  with the Owner to cooperate with the Architect
and utilize the Contractor's best skill and judgment in furthering the interests
of the Owner; to furnish efficient business  administration and supervision;  to
make best  efforts  to furnish at all times an  adequate  supply of workers  and
materials;  and to  perform  the Work in the best way and most  expeditious  and
economical  manner  consistent with the interests of the Owner. The Owner agrees
to exercise  best  efforts to enable the  Contractor  to perform the Work in the
best way and most expeditious manner by furnishing and approving in a timely way
information  required by the Contractor and making payments to the Contractor in
accordance with the requirements of the Contract Documents.

                                    ARTICLE 3

                 DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION

3.1 The date of  commencement  is the  date  from  which  the  Contract  Time of
Paragraph  3.2 is measured,  and shall be the date of this  Agreement,  as first
written above,  unless a different date is stated below or provision is made for
the date to be fixed in a notice to proceed issued by the Owner.

The Date of  Commencement  shall be the first day after both parties have signed
the original  Agreement or a later date agreed upon by both parties.  Contractor
must file a Notice of  Commencement  per  Georgia  Law. A recorded  copy will be
maintained in the Contractor's file and on the jobsite.

3.2 The Contractor shall achieve  Substantial  Completion of the entire Work not
later than 14 months after the Date of  Commencement,  subject to adjustments of
this Contract Time as provided in the Contract Documents.

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AIA DOCUMENT A117 o ABBREVIATED  COST-PLUS  OWNER-CONTRACTOR  AGREEMENT o SECOND
EDITION o AIA(R) (C)1987 o THE AMERICAN  INSTITUTE OF ARCHITECTS,  1735 NEW YORK
AVENUE, N. W., WASHINGTON, D.C. 20006
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                                       2
<PAGE>

                                    ARTICLE 4

                                  CONTRACT SUM

4.1 The Owner shall pay the  Contractor  in current  funds for the  Contractor's
performance  of the Contract the Contract Sum consisting of the Cost of the Work
as defined in Article 5 and the Contractor's Fee determined as follows:

The Contractor  shall be paid monthly on a cost basis plus the  Contractor's fee
of 10%,  payable on the 10th of each month unless the 10th falls on the weekend,
then payment shall be due on the next business day. The Contractor  shall submit
an  invoice to the Owner no later  than the 1st of the  following  month for all
expenses  incurred in the preceding month. This invoice shall include a detailed
listing of all expenses which shall include invoice numbers,  dates, supplier or
subcontractor  identification and amounts due. The 10% Contractor's Fee shall be
billed as a separate line item on the invoice.

4.2      GUARANTEED MAXIMUM PRICE (IF APPLICABLE)

4.2.1 The sum of the Cost of the Work and the  Contractor's Fee is guaranteed by
the  Contractor  not to exceed N/A Dollars ($ N/A ),  subject to  additions  and
deductions by Change Order as provided in the Contract  Documents.  Such maximum
sum is referred to in the Contract  Documents as the  Guaranteed  Maximum Price.
Costs which would cause the  Guaranteed  Maximum  Price to be exceeded  shall be
paid by the Contractor without reimbursement by the Owner.

                  N/A

4.2.2 The Guaranteed  Maximum Price is based upon the following  alternates,  if
any,  which are described in the Contract  Documents and are hereby  accepted by
the Owner:

                  N/A

4.2.3    The amounts agreed to for unit prices, if any, are:

                  N/A

                                    ARTICLE 5

                             COSTS TO BE REIMBURSED

5.1 The term "Cost of the Work"  shall mean costs  necessarily  incurred  by the
Contractor in the proper  performance of the Work.  Such costs shall be at rates
not higher than the standard paid at the place of the Project  except with prior
consent of the  Owner.  The Cost of the Work  shall  include  only the items set
forth in this Article 5.

5.1.1 Wages of  construction  workers  directly  employed by the  Contractor  to
perform  the  construction  of  the  Work,   including   welfare,   unemployment
compensation, social security and all other benefits.

5.1.2 Costs, including  transportation,  of materials and equipment incorporated
or to be incorporated in the completed construction.  All discounts for cash for
prompt payment shall accrue to the Contractor.

                                       3
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AIA DOCUMENT A117 o ABBREVIATED  COST-PLUS  OWNER-CONTRACTOR  AGREEMENT o SECOND
EDITION o AIA(R) (C)1987 o THE AMERICAN  INSTITUTE OF ARCHITECTS,  1735 NEW YORK
AVENUE, N. W., WASHINGTON, D.C. 20006
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<PAGE>

5.1.3 Payments made by the Contractor to  Subcontractors  in accordance with the
requirements of the subcontracts.

5.1.4 Costs of all materials, temporary facilities, equipment and hand tools not
customarily  owned  by the  construction  workers,  which  are  provided  by the
Contractor at the site and fully consumed in the performance of the Work.

5.1.5 Reasonable  rental costs for necessary  temporary  facilities,  machinery,
equipment,  and hand tools used at the site of the Work, whether rented from the
Contractor or others.  Rates and quantities of equipment rented shall be subject
to the Contractor's prior approval.

5.1.6 That  portion  directly  attributable  to this  Contract of  premiums  for
insurance and bonds.

5.1.7 Losses and expenses, not compensated by insurance or otherwise,  sustained
by the Contractor in connection with the Work,  provided they have resulted from
causes other than the fault or neglect of the Contractor.

5.1.8    Costs of removal of debris from the site.

5.1.9 Costs incurred in taking action to prevent  threatened  damage,  injury or
loss in case of an emergency affecting the safety of persons and property.

5.1.10 All other  costs  incurred in the  performance  of the Work if and to the
extent approved in advance in writing by the Owner.

                                    ARTICLE 6

                           COSTS NOT TO BE REIMBURSED

6.1      The Cost of Work shall not include:

6.1.1 Salaries and other compensation of the Contractor's personnel stationed at
the Contractor's  principal  office or offices other than the site office,  with
the exception of the Vice President of Estimating.

6.1.2 Expenses of the  Contractor's  principal office and offices other than the
site office.

6.1.3  Overhead and general  expenses,  except as may be  expressly  included in
Article 5.

6.1.4 The Contractor's capital expenses,  including interest on the Contractor's
capital employed for the Work.

6.1.5 Costs due to the fault or  negligence of the  Contractor,  Subcontractors,
anyone directly or indirectly  employed by any of them, or for whose acts any of
them may be liable,  including  but not  limited  to,  costs for  correction  of
damaged,  defective or nonconforming Work, disposal and replacement of materials
and  equipment  incorrectly  ordered  or  supplied,  and making  good  damage to
property not forming part of the Work.

6.1.6    Any cost not specifically and expressly described in Article 5.

6.1.7  Costs  which  would cause the  Guaranteed  Maximum  Price,  if any, to be
exceeded.

                                       4
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AIA DOCUMENT A117 o ABBREVIATED  COST-PLUS  OWNER-CONTRACTOR  AGREEMENT o SECOND
EDITION o AIA(R) (C)1987 o THE AMERICAN  INSTITUTE OF ARCHITECTS,  1735 NEW YORK
AVENUE, N. W., WASHINGTON, D.C. 20006
--------------------------------------------------------------------------------
<PAGE>

                                    ARTICLE 7

                         DISCOUNTS, REBATES AND REFUNDS

7.1 Cash discounts  obtained on payments made by the Contractor  shall accrue to
the Owner if (1) before making the payment,  the Contractor  included them in an
Application for Payment and received payment therefor from the Owner, or (2) the
Owner has  deposited  funds with the  Contractor  with  which to make  payments;
otherwise,  cash  discounts  shall accrue to the  Contractor.  Trade  discounts,
rebates,  refunds  and  amounts  received  from sales of surplus  materials  and
equipment shall accrue to the Owner, and the Contractor shall make provisions so
that they can be secured.

7.2  Amounts  that  accrue to the Owner in  accordance  with the  provisions  of
Paragraph 7.1 shall be credited to the Owner as a deduction from the Cost of the
Work.

                                    ARTICLE 8

                               ACCOUNTING RECORDS

8.1 The  Contractor  shall keep full and detailed  accounts  and  exercise  such
controls  as may  be  necessary  for  proper  financial  management  under  this
Contract; the accounting and control systems shall be satisfactory to the Owner.
The Owner and the Owner's  accountants  shall be afforded access to Contractor's
records  relating to this Contract.  The Contractor shall preserve these records
for a period of seven years after final  payment,  or for such longer  period as
may be required by law.

                                    ARTICLE 9

                                PROGRESS PAYMENTS

9.1 Based upon  Applications for Payment  submitted to the Owner's  construction
inspector by the Contractor and  Certificates  for Payment issued by the Owner's
construction inspector, the Owner shall make progress payments on account of the
Contract Sum to the Contractor as provided in the Contract Documents. The period
covered by each  Application  for Payment shall be one calendar  month ending on
the last day of the month.

9.2 Payments due and unpaid under the Contract shall bear interest from when the
payment is due at the rate stated below, or in the absence thereof, at the legal
rate prevailing from time to time at the place where the Project is located.

            The prevailing prime rate of First Union National Bank, plus 1%.

                                   ARTICLE 10

                                  FINAL PAYMENT

10.1 Final payment,  constituting the entire unpaid balance of the Contract Sum,
shall be paid by the  Owner to the  Contractor  when (1) the  Contract  has been
fully performed by the Contractor except for the Contractor's  responsibility to
correct  nonconforming  Work and to satisfy other  requirements,  if any,  which
necessarily  survive final payment,  and (2) a final Certificate for Payment has
been issued by the Owner's construction inspector.

                                       5
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AIA DOCUMENT A117 o ABBREVIATED  COST-PLUS  OWNER-CONTRACTOR  AGREEMENT o SECOND
EDITION o AIA(R) (C)1987 o THE AMERICAN  INSTITUTE OF ARCHITECTS,  1735 NEW YORK
AVENUE, N. W., WASHINGTON, D.C. 20006
--------------------------------------------------------------------------------
<PAGE>

                                   ARTICLE 11

                        ENUMERATION OF CONTRACT DOCUMENTS

11.1  The  Contract   Documents  are  listed  in  Article  12  and,  except  for
Modifications  issued after the execution of this  Agreement,  are enumerated as
follows:

                  N/A

11.1.1 The  Agreement is this  executed  Abbreviated  Form of Agreement  Between
Owner and Contractor, AIA Document A117, 1987 Edition.

11.1.2  The  Supplementary  and  other  Conditions  of the  Contract  are  those
contained in the Project Manual dated N/A , and are as follows:

Document                             Title              Pages

                  N/A

11.1.3 The  Specifications are those contained in the Project Manual dated as in
Subparagraph 11.1.2, and are as follows:

Section                              Title              Pages

                  N/A

                                       6
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AIA DOCUMENT A117 o ABBREVIATED  COST-PLUS  OWNER-CONTRACTOR  AGREEMENT o SECOND
EDITION o AIA(R) (C)1987 o THE AMERICAN  INSTITUTE OF ARCHITECTS,  1735 NEW YORK
AVENUE, N. W., WASHINGTON, D.C. 20006
--------------------------------------------------------------------------------
<PAGE>

11.1.4   The Drawings are listed on:

Number                     Title               Pages

         Exhibit "A" List of  Drawings  shall be provided  upon  completion  and
         acceptance of approved Plans & Specifications.

11.1.5   The Addenda, if any, are as follows:

Number                    Title                Pages

                  N/A

Portions  of  Addenda  relating  to  bidding  requirements  are not  part of the
Contract  Documents unless the bidding  requirements are also enumerated in this
Article 11.

11.1.6   Other Documents, if any,  forming part of the Contract Documents are as
         follows:

         Exhibit "B"  Application  for Payment to follow.  (To be provided  upon
         commencement of construction).

This  Agreement  is entered as of the day and year  first  written  above and is
executed in at least three original  copies,  of which one is to be delivered to
the  Contractor,  one to  the  Owner's  construction  inspector  for  use in the
administration of the Contract, and the remainder to the Owner.

--------------------------------------         ---------------------------------
ROBERTS PROPERTIES                             ROBERTS PROPERTIES
RESIDENTIAL, L.P.                              CONSTRUCTION, INC.
a Georgia limited partnership

By:  Roberts Realty Investors, Inc., its sole
     General Partner

/s/ Charles R. Elliott                         /s/ Charles S. Roberts
-------------------------------------------    ---------------------------------
Charles R. Elliott, Chief Financial Officer    Charles S. Roberts, President

                                       7
 -------------------------------------------------------------------------------
AIA DOCUMENT A117 o ABBREVIATED  COST-PLUS  OWNER-CONTRACTOR  AGREEMENT o SECOND
EDITION o AIA(R) (C)1987 o THE AMERICAN  INSTITUTE OF ARCHITECTS,  1735 NEW YORK
AVENUE, N. W., WASHINGTON, D.C. 20006
--------------------------------------------------------------------------------

<PAGE>

                          EXHIBIT "A" LIST OF DRAWINGS

The Preston Phillips Partnership, Inc.
Dated  __________  Revised _____________

   ARCHITECTURAL                           MECHANICAL
   -------------                           ----------

   Site Plan                               HVAC - Unit "B" & "C" Floor Plans
   Structural Notes                        HVAC - Schedules, Details & Legend
   Floor Plan Unite "B"
   Floor Plan Unit "C"                     ELECTRICAL
                                           ----------
   Type I Building Plans
   Type II Building Plans                  Unit "B" & "C" Floor Plans
   Type III Building Plans                 Unit "B" & "C" Floor Plans
   Type III Building Plans                 Unit "B" & "C" Floor Plans
   Type III Building Plans                 Building Floor Plans
   Type III Building Plans
   Type III Building Plans                 PLUMBING
                                           --------
   Bldgs. Type I Foundation Plans
   Bldgs. Type II Foundation Plans         Plum- Unit "B" & "C" Floor Plans
   Bldgs. Type III Foundation Plans        Building Plans - Plumbing
   Bldgs. Type III Foundation Plans        Notes, Schedules & Details
   Unit "B" & "C" Floor Framing Plans
   Building Type I Roof Plan
   Building Type II Roof Plan
   Building Type III Roof Plan
   Building Type III Roof Plan
   Building Type I Elevations
   Building Type II Elevations
   Building Type II Elevations
   Building Type III Elevations
   Building Type III Elevations
   Building Type III Elevations
   Building Type III Elevations
   Stair Sections
   Wall Sections
   Wall Sections
   Deck Section
   Details
   Details
   Details
   Schedules
   Interior Elevations
   Fire
   Carwash/Maintenance
   Carwash/Maintenance

   Trash Compactor

                                       8

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AIA DOCUMENT A117 o ABBREVIATED  COST-PLUS  OWNER-CONTRACTOR  AGREEMENT o SECOND
EDITION o AIA(R) (C)1987 o THE AMERICAN  INSTITUTE OF ARCHITECTS,  1735 NEW YORK
AVENUE, N. W., WASHINGTON, D.C. 20006
--------------------------------------------------------------------------------

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