Developer project specific corporations
Developer project specific corporations
(OP)
How does everyone feel about the practice of developers setting up special purpose project corporations when they buy or develop a big building? It is to avoid liability, which has the effect of passing it onto everyone else, including engineers and contractors. I am about to sign a contract with a name brand NYC developer for the design of a feature element in a tall office building in LA, but nominally with the XYZ Holdings LP, the wholly owned subsidiary of the developer. Personally I think it's gross and dishonest.
RE: Developer project specific corporations
Makes you wish you could set up a LLC for each one of your projects... XYZ Holdings - Glass 99 Structural LLC.
RE: Developer project specific corporations
RE: Developer project specific corporations
Cheers
Greg Locock
New here? Try reading these, they might help FAQ731-376: Eng-Tips.com Forum Policies http://eng-tips.com/market.cfm?
RE: Developer project specific corporations
RE: Developer project specific corporations
It's so sketchy that I really wonder why its allowable.
RE: Developer project specific corporations
Not going fly, since your engineering liability is personal, not corporate. You cannot shield yourself, ala LLC, since the engineering design is stamped by you personally.
TTFN (ta ta for now)
I can do absolutely anything. I'm an expert! https://www.youtube.com/watch?v=BKorP55Aqvg
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RE: Developer project specific corporations
RE: Developer project specific corporations
TTFN (ta ta for now)
I can do absolutely anything. I'm an expert! https://www.youtube.com/watch?v=BKorP55Aqvg
FAQ731-376: Eng-Tips.com Forum Policies forum1529: Translation Assistance for Engineers Entire Forum list http://www.eng-tips.com/forumlist.cfm
RE: Developer project specific corporations
Yes, a joint venture would be a legit reason to form a corporation.
Do they actually do this? What's the rationale? I would have thought that any profit would simply be passed up to the main corporation.
RE: Developer project specific corporations
A corporation headquartered in, say Ireland, would have a different tax burden than the same company headquartered in New York; a way to avoid moving one's headquarters would be to create a separate corporation headquartered elsewhere to take advantage of the tax shelter.
TTFN (ta ta for now)
I can do absolutely anything. I'm an expert! https://www.youtube.com/watch?v=BKorP55Aqvg
FAQ731-376: Eng-Tips.com Forum Policies forum1529: Translation Assistance for Engineers Entire Forum list http://www.eng-tips.com/forumlist.cfm
RE: Developer project specific corporations
RE: Developer project specific corporations
Could you elaborate on what those reasons are?
Large companies have divisions with their own operational structures all the time - should Ford have one company to make F150's and another to make Econovans? There is nothing stopping Ford from tracking F150's sales figures separately to the Econovans, or even using different dealers (aka real estate brokers) for different models. These "different corporations" are usually run by the same people in the same headquarters office (as is the case for at least three of my developer clients).
What if Ford said "aha, our lawyers are so clever, I know the Pinto blew up but it was sold by Pinto LLC, not Ford, so it's not our problem!"
RE: Developer project specific corporations
Personally I dont see what the big deal is, everybody including engineers leverage corporate liability laws to shield themselves to one extent or another and there are various legal ways for potential victims to breach those shields and seek damages. Usually when you take the time to dig into the legaleze, the boogeymen disappear.
RE: Developer project specific corporations
https://www.entrepreneur.com/article/314005
RE: Developer project specific corporations
Also common is the establishment of "trusts", often in the form of a "family trust" by almost every business owner, especially architects and engineers. The purpose of the trust is to take care of the family members, keep the family house for the family, etc. So people pile all their money into family trusts, then if they get sued, there is nothing to take. They simply shut down their company and become a trust fund baby.
RE: Developer project specific corporations
@NorthCivil: Is it really common for engineering firm owners to transfer their assets to a trust? I have thought about doing that.
RE: Developer project specific corporations
RE: Developer project specific corporations
RE: Developer project specific corporations
SOP in Oz for directors and so on.
Cheers
Greg Locock
New here? Try reading these, they might help FAQ731-376: Eng-Tips.com Forum Policies http://eng-tips.com/market.cfm?
RE: Developer project specific corporations
RE: Developer project specific corporations
https://www.fairtrading.nsw.gov.au/housing-and-pro...
A lot of provisions around disputing the appointment of the building inspector. Pretty obvious that developers would try to appoint a less observant one.
RE: Developer project specific corporations
RE: Developer project specific corporations
Originally, the payment claim had to state it was made under the SOPA act but clients/contractors put pressure for this not to be done (of course) which negated the legislation. So the legislation was revised that SOPA applies regardless and can't be excluded by contract provisions (any such contract provision is automatically void).
In summary, payment-dodging is only cured by big sticks in this industry.
RE: Developer project specific corporations
Opportunities in facade consulting is just booming in OZ and especially in NZ
RE: Developer project specific corporations
Good question. I know Australia is doing well in general, but last I checked in with my Australian colleagues the facade world is dominated by cheap Chinese imports. We have done a couple of projects in Sydney in the last couple of years for iFly and Sydney University, so maybe there is something. Here in NYC my niche is aging billionaires who have a hankering to build something in unobtainium. You are right about the cafes and weather though.
RE: Developer project specific corporations
its not glamour engineering by any means, more rolling up your sleaves and getting into the mess type engineering.
RE: Developer project specific corporations
Yes it's the same in the US on the whole. Big firms like Vidaris here in NYC are geared around reviewing imported curtain wall, including earning most of their fee in the construction phase. One of my clients is a Chinese glass fabricator and we calculate thermal stresses and other things for them for US projects.
But last I heard, a lot of Australian consultants were giving up this form of facade consulting, and instead focusing on forensics and expert witness work.
RE: Developer project specific corporations
Forensic and witness work pays double or triple what design work pays, with none of the liability. The forensic work often leads you to a re-furb project where doing it right is a high priority!
To boot, there so many buildings that are complete disasters, that there is so much forensic and expert witness work out there!
Unfortunately this is the state of the industry, it will take some time to recover from.
No wonder your mates are trying to get out of new builds and into restorations!