Construction Corruption - What Every CRE Investor Should Know

 Posted on December 00, 0000 in Commercial Real Estate

Commercial real estate investors heavily rely on the work of construction companies. Sadly, corruption within the construction industry is costing investors millions of dollars each year. Learn how you can mitigate against such issues during your next real estate transaction, and discover how the aid of a competent real estate attorney can save you both time and money.

Construction Corruption is Rampant in CRE Development 

One would like to believe that the stories of corruption are one-offs, rarities that can be easily avoided. Unfortunately, nothing could be further from the truth. Corruption in form of bribery, larceny, extortion, grafting, and bid-rigging are rampant in the construction industry, and CRE developers are some of the most heavily impacted victims. If hit severely or frequently enough, corruption could have a permeant and catastrophic effect on a developer's bottom line.

Construction Corruption and Your Bottom Line

Being charged for seven trash receptacles instead of the four that were used may not seem like a major issue, but consider what would happen if every item on your bill were inflated, or if you were repeatedly overcharged for the receptacles used on every project. Over time, the cost would add up. To make matters worse, CRE developers often work with multiple labor teams, rather than just one. Each labor team or professional increases the risk of construction corruption (and its associated costs) even further. Thankfully, there are ways that developers can mitigate the risks and reduce their costs.

Protecting Your Investment from Construction Corruption

While there is no fool-proof way to protect your business from construction corruption, there are some strategies that you can use to reduce your overall risk. First and foremost, ensure that you appoint someone that you trust to oversee all projects. Secondly, hire a seasoned real estate attorney to ensure that all contracts and negotiations have been properly vetted. Lastly, trust your gut: if something does not seem right, investigate the matter further. Ask questions and seek skilled legal assistance whenever necessary.

Contact Our Naperville Commercial Real Estate Lawyers

At Lindell & Tessitore, P.C., the future of your company is our top priority. Our seasoned Naperville commercial real estate lawyers offer skilled and professional assistance in even the most complex of situations. We handle the legal matters so that you can focus on what matters most. Schedule your consultation to get started. Call 630-778-3818 today.

Source:

https://therealdeal.com/issues_articles/the-anatomy-of-construction-corruption/