Quote:
Originally Posted by nickw252
I'm an attorney who spent years working in governmental regulatory compliance consulting for large businesses (many of whom were developers). Not once did I see a company intentionally try to defraud regulators by working in cahoots with contractors (or any rank and file employee for that matter). I've seen businesses take aggressive positions, but never intentional non-compliance.
I'm not saying that it's impossible. From my experience, I'm just saying that it's improbable for a business that can get tens of millions in financing to be doing something like that.
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Right, which is why my experience has led my to believe that this could conceivably happen in small-scale projects. Likely not something like a 20 story residential building - but definitely could happen with a single family home or small commercial project. I believe this DOES indeed happen regarding "historic" single family homes for certain - but I would bet often times the "developer" and builder are essentially the same entity.
Either way, a lender likely does NOT really have a good way of knowing if a "builder" privately discussed with their contractors (particularly if they personally know one-another which again is very common in the development world) and concocted such a plan to circumvent whatever obstacle the existing structures present - one way or the other unless they are going to send in their own construction/engineering/architectural professionals to gain an independent assessment - and that could likely be financially justifiable if the amount being lent is large enough or the issue at hand presents some sort of potential liability to be concerned about - but I really would doubt that historic preservation for preservation's sake would raise such attention - but what do I know.
It reminds me of the Russian oligarch whose "Polish contractor" "mistakenly" demolished a 17th century protected chateau in France - the owner blamed the contractor but also conveniently had the chateau renovation out of the way and a fresh slate to do what he wanted with the once-protected property.