12 Tips to Choose the Ultimate Developer
Your choice of developer will follow you for years to come. It is a long-term partnership, so it’s crucial to take it seriously and invest time and thought into it.
What to do:
With guidance from your legal counsel, engage in negotiations to secure the maximum return while unequivocally ensuring legal protection for the property. Throughout the entire process, remember: for a transaction of such magnitude and life-altering implications, it is essential to partner with a financially sound developer who can confidently shoulder the risks, guaranteeing your peace of mind.
The urban renewal market has suffered over the years from various ‘disasters’, with grand promises that were signed on exaggerated agreements only to crumble. Knowledge gaps and the limited capabilities of eager but undercapitalized and inexperienced developers led to projects starting with lofty ambitions and ended up achieving nothing. This resulted in a grim reality – tens of thousands of apartments stalled nationwide, and frustrated residents.
What to do:
While maximizing your returns is important, it’s equally important to keep them realistic. Your primary interest is ensuring that the developer can successfully and safely complete the project, delivering your new apartment on the fastest and most dependable track.
It is crucial to evaluate the experience and professionalism of the developer in the relevant field – from an engineering perspective, considering the required expertise and licenses, and in terms of the complexity of similar past projects. The decision you make should be responsible and deliberate. Opt for a reliable and seasoned partner with a solid reputation, capable of providing a holistic approach – especially in evolving situations. This guarantees your peace of mind, simplifies the complex process, and ensures a secure, convenient, and streamlined experience.
A project that involves relocating thousands of residents and constructing hundreds of housing units requires a cashflow of hundreds of millions of shekels. This demands substantial capital and financial resilience, a characteristic found only in major players in the urban renewal sector.
When it comes to your property and the roof over your head, the last thing you want is uncertainty, ambiguity, and a hope that ‘it will be okay’. Therefore, selecting a company with a strong track record, financial robustness, and the ability to navigate and negotiate with banks is nothing short of critical.
What to do:
Thoroughly examine the company’s financial standing, its legal background, and the level of trust it has earned. Is the company consolidated and registered with the Companies Registrar as required by law? Who are the shareholders? In intricate projects, especially those where multiple companies are involved, carefully evaluate the developer’s partners. This approach allows you to assess the company’s stability and its commitment to financing the project in case of delays or unexpected cost increases.
How to assess the developer’s financial robustness:
Examine the developer’s portfolio of completed projects and review the company’s financial reports. Websites such as BDI, Dun’s 100, and others provide diverse metrics concerning financial capabilities. Assess the company’s relationship with various banks. A simple search on Google or the Ministry of Justice’s Companies Registrar website can reveal any existing legal issues and their implications.
Prioritize publicly traded companies whose reports are transparent at any given moment such as “Aura – Renewing Israel”.
Ensure that the company provides you with the necessary guarantees and assurances as required by the Sales Law. Guarantees are meant to cover any negative repercussions that may arise from any action or decision by the developer, ensuring that if the project is halted for any reason, you will be entitled to compensation equivalent to the expected value at the project’s completion.
What to Do:
Your legal counsel can obtain information about the required guarantees to secure the transaction (it’s important that they come from a bank or insurance entity):
- Sale Law Guarantee – ensures receipt of the apartment if the developer fails to meet its commitments;
- Tax Guarantee – in case the apartment owners are required to pay taxes;
- Rent Guarantee – covering rent during the eviction period;
- Defects Guarantee – ensures rectification of possible future defects;
- Performance Guarantee – ensures project execution per contract terms;
- Registration Guarantee – ensures registration of the apartment and the joint property in the land registry.
Every resident is a world unto themselves, and with each resident comes a unique set of challenges. Trust can only be placed in an experienced developer who already knows how to navigate the hurdles and unforeseen obstacles that unexpectedly arise during the process.
What to Do:
It’s crucial to choose a reputable and serious company with a strong track record and a proven ability to solve problems with genuine care and creativity. Opt for a company with extensive experience in the field and which provides you with a professional team combining knowledge and expertise in all aspects of the redevelopment process (planning, financial, engineering, and legal). Choose a company that instills in you a sense of certainty and assurance, knowing that there is someone reliable to lean on.
In addition to critical factors such as financial resilience, relevant project experience, returns, and guarantees, there’s another equally important consideration: with someone who is set to be a part of your life for an extended period of time, good communication is essential.
What to Do:
Keep both your eyes and heart open and choose a company that truly sees the residents and knows how to provide a personal touch. Reality teaches us that beyond invoices, experience, and professionalism, the ability and willingness of the developer to become “mom and dad” to the property owners is equally important.
It’s not easy to persuade an elderly person to leave their home for four years for the sake of a construction project. They are accustomed to their neighbors across the street, their synagogue, and their familiar surroundings. They fear the uncertainty of the prolonged process and worry that the developer might go bankrupt or disappear without a trace. A special bond of trust is required. This trust can be found in a developer who will look you in the eyes, present all the conditions for your home to be built, and promises that you will receive – from their own hands – the key to your new home.
What to Do:
Search for a developer who sees you as partners, not simply customers. They will know how to treat all residents as equals. Ensure that you engage with a value-driven company with a service-oriented mindset and sensitivity to your needs, one that can provide high-level personal attention and stand by your side when you need it.
Examine the developer’s DNA, its core values: does it conduct business based on vision and sense of duty, and not solely economic considerations? Is it important for them to create value for the environment and society? Do they see their projects as a means to solve problems and challenges facing the State of Israel? Does their track record prove that they’ve succeeded in positively transforming the face of neighborhoods nationwide and the lives of their residents?
What to Do:
If all these conditions align in the company’s roadmap, rest assured that you are heading in the right direction with your choice.
In Israel there are prominent developers with an impressive portfolio of dozens or even hundreds of successful projects. However, not all of them excel in redevelopment projects. Urban renewal is a specialized niche that demands distinct knowledge and expertise in this specific domain.
What to Do:
When choosing a developer to guide you through such a unique and significant process, opt for a company that, by its very nature, specializes in redevelopment projects.
Don’t rely solely on promotional images and marketing materials. Connecting with residents who have already experienced the full process with the developer offers a more comprehensive picture. By directly hearing from them, you can gain valuable insight into their experiences, the challenges they faced, how the developer assisted them, the demonstrated professional capabilities, and the reliability and availability in addressing questions and requests.
What to Do:
Request information directly from primary sources, spanning from the initial stages of the process until moving into the new apartment. These early adopters will assist you in dispelling uncertainties, providing a clear, informative, and balanced picture, and undoubtedly offering reassurance. Don’t overlook this crucial phase.
The process of urban renewal has its ups and downs over the years, and it’s crucial to be exposed to information, be knowledgeable about the details, and be open to changes if they occur.
What to do:
Choose a company that believes in transparency, reliability, and partnership. Give preference to a publicly traded company (like “Aura – Renewing Israel”) traded on the stock exchange, which presents its financial reports with complete transparency and avoids hiding behind ambiguous data.
