How to check the developer before you start cooperating with him?

Fifteen years have passed since the 2008 crisis. It started with the mortgage bubble in the USA and affected the whole world, including Russia: many developers went bankrupt and shareholders were left without housing.

This has led to serious changes in legislation: guarantees for shareholders have been strengthened, payment through special escrow accounts has been introduced and requirements for developers have been tightened. Nevertheless, delays in house delivery and legal disputes are not uncommon.

I have been working as a real estate lawyer for over eight years and often handle cases of defrauded shareholders. I will tell you how to choose the right developer and what to pay particular attention to.

But you should not focus only on the rating of real estate developers for the following reasons:

This is a commercial rating, not a state rating. The evaluation criteria there are not always clear and transparent.

The rating does not take into account nuances. For example, a company was building a house with delays, and then its owner changed - it happens with legal entities. And it turned out that the first company postponed the deadlines, but the second company completed the construction - and exactly in the time that it promised. And all the following objects were delivered on time. But there are no such subtleties in the object card.

There may be inaccuracies in the rating, especially for smaller developers. For example, it may be stated that the developer has several completed housing estates, but in fact all these housing estates were built by different legal entities.

I recommend considering all the criteria together. And before concluding a contract, gather up-to-date information about a particular housing estate. I will tell you in detail how to do this.

But you should not focus only on the rating of real estate developers for the following reasons:

This is a commercial rating, not a state rating. The evaluation criteria there are not always clear and transparent.

The rating does not take into account nuances. For example, a company was building a house with delays, and then its owner changed - it happens with legal entities. And it turned out that the first company postponed the deadlines, but the second company completed the construction - and exactly in the time that it promised. And all the following objects were delivered on time. But there are no such subtleties in the object card.

There may be inaccuracies in the rating, especially for smaller developers. For example, it may be stated that the developer has several completed housing estates, but in fact all these housing estates were built by different legal entities.

I recommend considering all the criteria together. And before concluding a contract, gather up-to-date information about a particular housing estate. I will tell you in detail how to do this.

The one-stop resource for real estate developers, the ERZ, has a page that ranks real estate developers. You can sort them:

• in terms of speed of construction;
• the amount of housing that's being rented;
• consumer qualities of housing complexes - a benchmark that evaluates more than one hundred parameters such as architecture, parking, social infrastructure, security, entrance groups, engineering systems and others.

But you should not focus only on the rating of real estate developers for the following reasons:

1. This is a commercial rating, not a state rating. The evaluation criteria there are not always clear and transparent.
2. The rating does not take into account nuances. For example, a company was building a house with delays, and then its owner changed - it happens with legal entities. And it turned out that the first company postponed the deadlines, but the second company completed the construction - and exactly in the time that it promised. And all the following objects were delivered on time. But there are no such subtleties in the object card.
3. There may be inaccuracies in the rating, especially for smaller developers. For example, it may be stated that the developer has several completed housing estates, but in fact all these housing estates were built by different legal entities.

I recommend considering all the criteria together. And before concluding a contract, gather up-to-date information about a particular housing estate. I will tell you in detail how to do this.