One the scale of one to ten for those that need asset
protection, real estate developers are an "11".
estate developers and construction companies are notorious in having one
of the highest potentials for significant liability and frivolous
litigation. Even after a project is sold, there is a string of liability
to purchasers and subsequent purchasers for many years to come.
Construction defects on a project many have been unforeseen and no
longer under the protection of a policy that has long since expired. In
some states, the length of time that a builder is responsible for latent
defects can be as long as ten years. With such a long term potential
liability hanging over the head of builder or developer, it easy to see
that a crippling lawsuit could occur at any time in the professional
life of the business owner. The liability could be the result of faulty
workmanship of a subcontractor that has long since gone out of business
and has left town. As is always the case, if you have meat on the bone,
the attorneys will come flocking to you.
Especially in the backdrop of our current declining real estate market,
lawsuits against developers, builders and general contractors are
inevitable. “Victimized” homeowners who have lost a substantial amount
of equity in the market will be looking for a “perp” to go after. Along
with their attorney, they will attempt to recoup the investment by
filing lawsuits, alleging construction defects against everyone involved
in the project. That would include the engineers, architects,
contractors, lenders, and title firms. While it would seem to be a
sleazy way to try to squeeze all parties involved, these cases are
costly and time consuming to defend. Without adequate insurance to
handle the length and complexity of these cases, most small to mid-size
firms would not be able to weather the storm.
All real estate projects of any significance are associated with large
amounts of investor cash, developer cash and a substantial amount of
debt. With all of those zeros and all those interested parties, a
development gone bad will bring years of litigation among the parties.
As a result, just one bad deal can wipe a developer and his/her years of
Because of the issue mentioned above, the risk of lawsuit is extremely
high. A developer or contractor is placing their collective behinds in
jeopardy every single day. When a doctor performs surgery, he is
literally betting the house on a daily basis as well. When something
goes wrong, someone will sue. Every patient, client, or customer is a
potential legal adversary.
For that reason, proper asset protection planning is essential to the
long term financial health of someone in that position. This site offers
articles, resources and links to help you make a better decision on your
financial health. There are substantial risks faced by professionals and
business owners. By recognizing the particular types of liabilities that
arise out of various commercial and personal relationships, you can
better plan your attack to protect those assets that you’ve worked so
hard to accumulate.
At assetprotection101.com, we offer the latest
news developments, strategies,
resources and links
relating to asset protection. Whether you a real
estate developer, real estate
owner or any business owner looking to better
educate themselves on how to protect their assets, we're sure you'll
find our site helpful in making a better decision about your financial
future. You may even choose to receive our free monthly
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developments in asset protection.