The representation, the owners' attorney and the advisers have been chosen — now we advance to choosing the developer. This time: how the invitation for bids runs, what the developer questionnaire is, the parameters for choosing, the difference between a developer and a contractor, and how the choice is actually made.
How does the invitation for developer bids run?
The recommended route is a competitive invitation for bids. The owners' attorney approaches several developers, with a timeframe for examining the bids fixed together with the representation. The attorney typically uses a comprehensive questionnaire sent to each interested developer, together with a technical specification prepared by the engineering supervisor for the owners. The questionnaire covers the building's details, the initial consent rate among the owners, and the request for a bid.
Is the developer a professional?
- General experience in residential construction — projects in planning, in execution, and completed in recent years.
- Proven urban-renewal experience: TAMA reinforcement (38/1), demolish-rebuild (38/2) and pinui-binui projects — especially within the relevant municipality — with each project's current status: negotiation, signed contracts, in execution, completed, occupied.
- Proof of financial strength and the ability to raise financing for the project.
Is the developer a mensch?
A crucial element to examine before engaging: how the developer behaves. How do you find out? Simply talk with owners who completed the journey with that developer. Ask about:
- The developer's (and the team's) attitude to owners during negotiation and construction, and their availability for questions and solutions.
- Whether owners were included in the planning at the permit stage, and their needs addressed where possible.
- How involved the developer personally (or senior officers) was, and who was in ongoing contact with the owners.
- Credibility.
- Meeting timelines — in planning and licensing as well as execution.
- Construction quality and the handling of defect repairs.
- Registration of the apartments and the condominium at the Land Registry.
- Whether the owners sum up the project as a success — and if not, why.
Developer or contractor?
A developer is the business entity that advances the deal — it must know the market and its risks, hold equity and be able to raise financing, and it hires professionals including execution contractors. A contractor is the entity that physically builds: by law it must be a registered contractor with the appropriate classification, employing engineers, site supervisors and crews. Some developers also build — a developer-contractor — which can be a good solution for projects whose economics are borderline, keeping margins sufficient for the project's financial accompaniment.
One attractive bid — or several competing ones?
Often a developer approaches the owners on its own initiative. But the more developers compete, the more each improves its opening bid against the others — and the beneficiaries are the owners, who end with meaningfully better terms than where the process began. (It's also important to understand what it means when a developer or organizer approaches you first and asks for a non-shop agreement — see our non-shop guide.)
Owners in an old building? Come set urban renewal in motion — we represent hundreds of apartment owners from the idea stage to the key.
For developers: the bid processes the firm runs for the owners
The firm advises owners' committees across urban-renewal complexes and runs the competitive bid process described above. More serious bidders means better offers for the owners — which is exactly why the door is open.
If you have a proven urban-renewal track record and the financial strength to back it, email your details — six lines, that's all. Every submission is reviewed against those complexes, and the choice always rests with the owners.
Developers with projects on attractive terms for the buyer groups the firm represents can say so in the same email — there, too, the firm acts solely for the group.
The above is initial information only and does not constitute legal advice or a substitute for it, and nothing stated above constitutes a recommendation to initiate legal proceedings or to refrain from doing so. Consult an attorney who practices in the field before taking any action. For the avoidance of doubt, responsibility for any consequence of relying on the above rests with the user alone.
General information — not legal advice.