Choosing the developer may be the most important decision in the project. A strong, experienced developer advances the plan, raises finance and completes construction. A weak developer may stall the building for years. So the choice should be made in an orderly way, not by signing with the first developer who knocks on the door.
A developer tender
Instead of negotiating with one developer, owners can approach several in parallel and ask for offers on uniform terms. This makes comparison easier, and competition usually improves the terms. The process is usually run by the committee and the owners’ lawyer, sometimes with an engineering supervisor or appraiser.
What to check about the developer
- Financial strength: financial statements, equity, bank accompaniment in previous projects.
- Experience: completed projects, not just those “in planning”. Visit a completed project and talk to owners there.
- The contractor: who will actually build, their classification and experience.
- Workload: how many projects the developer is advancing at once.
- Legal proceedings: claims or disputes with owners in other projects.
How to compare offers
Don’t look only at the added square metres. Compare the whole package: area, specification, parking, rent, securities, timetables, delay compensation and management fee contributions.
The decision
The developer is chosen at an owners’ meeting. Document the process and the decision to prevent later claims. On the majority required, see required majority in pinui-binui.
After the choice
The terms offered must then be incorporated into a detailed, binding agreement. See key clauses in a pinui-binui agreement.
Next steps
Every pinui-binui project is different: the building, the developer, the plan and the owners themselves. At Paz Israel & Co. we represent apartment owners in urban renewal projects, review the offer and the agreement and support the owners’ committee throughout. See our pinui-binui and urban renewal page, or contact us to arrange a meeting in Tel Aviv, Jerusalem or Modi’in.
This article provides general information about Israeli law as of the time of writing and is not legal advice.