The key, say experts, is to choose a developer with a solid record. Even so, sales contracts typically limit developers liability should things go wrong.
Related Groups MyBrickell project is typical.
Jorge Perez, Relateds CEO, has built more condos than just about anyone. But the contract isnt with Jorge Perez or the Related Group. Its with a newly created entity called TRG Brickell Station Ltd, a limited partnership.
According to the prospectus, The developer is a relatively newly formed entity, and as such, has no prior experience in condominium or other real estate development.
The disclosure papers name Rosso, Relateds condo-division president, as the point person who will be directing the creation and sale, citing his 20-year record in development. But they go on to say his information is provided to comply with state law and is not intended to create or suggest any personal liability on the part of Mr. Rosso.
Such limited-liability structures are standard in new condo sales agreements. Each project typically has its own equity investors, such as individuals, private equity funds, REITs and the like.
Thats the legalese of the attorneys, said Rosso, noting Related and Perez are named in all marketing materials and brochures. Related stands behind every project. He added that the key for buyers is to pick a solid developer.
I would want to be with a so-called reputable, quality developer, said Ralph Bekkevold, a Greenberg Traurig attorney who teaches real estate law at the University of Miami. But even using that standard isnt a guarantee. All these developers, it used to be they wouldnt walk away from a project, but now people will walk away and regroup.