Sympathy for the Developer?

Please allow me to introduce myself, I’m a developer of wealth and taste...’ as Jagger almost said. And with those words agents fell over themselves to market off-plan properties that investors bought and traded with dreams of easy riches. But as those dreams faded and the harsh economic realities set in, the tide of public opinion turned against developers who now stood accused of having stolen many a man’s soul and faith. The charge list included completion delays, payments not linked to construction, hidden charges and moving of goalposts on issues like visa entitlement. But are we right to paint the developers as the villains, or should we have some sympathy for them?

Developers - and here I am referring to sub-developers as opposed to master developers - have found themselves caught between a rock and a very hard place. On one side, they have usually entered into agreements with master developers under which they are obliged to pay for and develop plots of land in accordance with strict guidelines. Such was the inequality of the bargaining position of the parties at the time, the agreements often imposed onerous duties on developers. On the other side, they have entered into agreements with buyers to build and handover completed properties by certain deadlines in return for payment. In an ideal world, all players would perform as anticipated and the back-to-back plan would come together, as Hannibal might say. But things rarely work that way in the post economic crash environment.

Download the complete article (PDF)

Lawyers Jerry Parks

Jerry Parks discusses the ongoing property development issues in the December edition of Property Magazine, reproduced with the kind permission of the editors.