One the scale of one to ten for those that need asset protection, real estate developers are an "11".

Real 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 hard work.

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 newsletter to keep you on top of the latest developments in asset protection.  
 

top