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RE Project Manager for development.

Discussion in 'Real Estate' started by artgul, 24th Apr, 2007.

  1. artgul

    artgul Well-Known Member

    16th Aug, 2005
    Was wondering if someone can assist with this question?:

    Have any one what sort of legal agreement has to be written with a Project Manager for a small RE development? and What sort of credential and insurance a Project Manager should have?

  2. Jacque

    Jacque Team InvestEd

    16th Jun, 2005
    Hi Artgul

    Sorry I can't help you with this but I have asked two very experienced IE members in this field to hopefully help you out with some answers. They've done dvpt projects themselves and will be able to provide you with more input than I can.
  3. Jane

    Jane Active Member

    16th Aug, 2005
    Hi Artgul

    I've done a few small developments in the past and have managed them myself, even from a different state. I decided to do this for a number of reasons, but the main two are that I had project management experience and I'm a bit of a control freak.

    However, I did talk to a Brisbane based development company by the name of Donald Cant Wants who will manage various stages of a development, if all stages are not required.

    A normal contract of services would be drawn up, including certain terms and conditions that both parties would agree to etc. Their fee is usually a percentage based one. An example of fees is on a $500k project their fee would be around $30-40k.

    I would recommend using a project manager with some experience for the first time around as, you can appreciate, many things to consider and keep track of. I think it is well worth the money spent.

    I would conduct normal due diligence on any project manager asking questions about timelines, fees, management processes, reporting, budgeting and past projects.

    Hope this has helped some. Good luck and lets know how you go.

  4. handyandy

    handyandy Well-Known Member

    6th Jun, 2006
    Sydney Nsw
    Hi Jane

    Nice to see a post from you;)

    Is that name for real Donald Can't Want's:cool: What a name:D

  5. KevinH

    KevinH Well-Known Member

    6th Nov, 2005
    I'm a bit like Jane in that pretty much all the developments I have done were my own so I never took on board a paid project manager.
    The ones that are interstate are in partnership with another investor so once again, no need for a paid project manager, however we do have paid consultants to do the various components that we are not qualified to do.

    The ones I do for other investors, ( Sydney based for Karratha properties) are simply a one page doc that outlines what my role is and what I have to deliver, as well as the payment terms. Its an agreement in writing with signatures from all parties so it is legally binding as far as I am aware.

    Anothe one we use is an 'agreement to engage' which once again spells out the service we are providing as well as the payment terms.
    This is a precursor to entering into a building contract, which is a standard doc anyway.

    Ask them to provide testimonials from satisfied customers and speak to them. Otherwise, the best testiminial is from someone you know and trust who has used them before.

    Most of the service providers I use are from this referral source.

  6. ProDev

    ProDev New Member

    25th May, 2007
    Perth, WA
    Development Contracts

    If you engage the services of a Project Manager you should have a contract in place with them outlining all of their obligations and responsibilities to you and the project. This will vary depending on the type of development you are undertaking and the extent of their role in the project. Many problems can and will arise during a property development!!! There is no 'off the shelf' type contract for this sort of thing, you must use the services of a lawyer that specialises in property contracts, JV's, developments etc.

    Ensure that the manager has professional indemnity insurance and keep records of communications between the relevant parties in the event of a breakdown in the business relationship or a dispute over responsibilities.


    Brad Samers
    ProDev Network
    ProDev | Property Development Network