The developer, the property manager, and the management company play different roles in the real estate market, although their responsibilities often overlap. The developer develops the concept of the future project, coordinates the implementation. The developer organizes the construction process. The management company is engaged in the maintenance of the building after commissioning, monitors the condition of the common property, and creates proper living conditions for residents.
Our experts analyzed the differences in the work of all market participants, analyzed what each of them is responsible for, and the specifics of interaction with apartment owners. In the material, we explain who develops the concept of a residential complex, who organizes construction, and who to contact if problems or shortcomings arise.
The developer
A developer is a participant in the real estate market. He organizes the development of a project from the very beginning to its final implementation with possible management, determines the concept of the future building. Additionally, he analyzes proposals, attracts specialists, plans the budget, and monitors commercial indicators. The developer works on behalf of an investor or owner, and is also an investor or initiator of the project on his own.
What does a developer do?
The key task of a developer is to transform an investment idea into a real estate project. It combines architecture, financial planning, marketing, and construction. The list of functions depends on the agreements between the project participants. Among them:
- market analysis;
- concept development;
- financial planning;
- estate planning;
- design organization;
- landscaping planning;
- sales and marketing;
- coordination of participants;
- budget and deadline control.
The developer does not have to invest his own money in construction or buy a plot. Quite often, the land owner simply hires him to manage the project, and the contractors build the walls themselves. That is, the developer is, first of all, the main organizer who brings all processes and contracts into a single whole. If we consider the developers of Kyiv, then DIM and BudCapital stand out here. There is information on the official websites that they are engaged in investment, sales, and design.
Who is on the developer team?
Once you understand who the developer is, you need to get to know their actual team. This includes:
- project managers and leadership;
- technical and design departments;
- architectural department;
- marketing department;
- financial department;
- legal department;
- sales department;
- operation specialists;
- Contract work and procurement department.
The developer does not handle all areas of work on his own. He may delegate some tasks to outside specialists and companies.
Who does the developer involve in the implementation of the project?
A developer company very rarely performs all the work on its own. Usually, a team is created from different organizations. They are assigned responsibilities, deadlines, budgets and tasks. This allows for specialized expertise to be involved at each stage. Among the participants are:
- financial partners and investors;
- land owners;
- architectural and design organizations;
- construction customers;
- contractors and general contractors;
- consultants, lawyers and appraisers;
- design and technical supervision engineers;
- real estate agents;
- marketing agents;
- management companies.
The developer coordinates all the main stages of work on the project and ensures that individual decisions are consistent with each other.
Forget Book
A developer is a company or an authorized person who organizes the construction of a residential complex and can sell apartments. Various companies can perform these roles. Developers in Kyiv are represented by a wide list, which includes the following: Integral-Bud, Kyivmiskbud, RIEL, Perfect Group, SAGA Development and others.
Developer functions
In practical terms, a developer organizes construction and carries out the necessary procedures. The main tasks and functions include:
- construction work;
- organization of construction site preparation;
- ensuring the availability of rights to a plot of land;
- obtaining permits;
- concluding contracts with contractors and other performers;
- use and development of project documentation;
- quality control and technical supervision;
- coordination of work;
- project compliance control;
- compliance with labor protection rules;
- fulfillment of obligations;
- acceptance of the real estate object.
The developer does not build houses on his own. There are construction contractors for this. The construction customer, within the limits of the powers assigned to him, organizes the entire process.
What is the developer's responsibility?
Responsibility is determined by the company's functions. Before buying real estate in a new building, they check all legal entities and the brand of the residential complex.
The developer, the customer of the project, is liable. This is possible if the customer provides services or performs work under the contract. Depending on the law and the terms of the contract, liability may apply to:
- compliance of the work performed with the design documentation;
- meeting deadlines;
- elimination of deficiencies for which the contractor is responsible;
- compliance with technical requirements;
- compensation for damages.
The terms of the contract determine the company's liability to apartment buyers if it is a party to the contract with the buyer. It fulfills the assigned obligations: conditions regarding the terms of transfer, elimination of defects, documents.
Who are a general contractor, contractor, and subcontractor?
During construction, several companies can perform work simultaneously. Each has its own scope of planned work. Functions are delimited by the availability of technical documentation, contracts, and applicable legislation. It is not necessary for a general contractor to be involved in every project. The contractor often performs work independently with the customer.
A general contractor is an organization that is capable of performing the main set of construction works, which is why it can coordinate the work of other contractors if this is provided for in the contract. The general contractor plans the sequence of work, organizes work on the site, and monitors the implementation of tasks.
A contractor is a company that is obligated to perform a set of specified tasks in accordance with a contract. Often, this is an organization that is engaged in performing specific types of work.
The subcontractor is a performer, therefore the contractor involves him in the fulfillment of a certain part of the obligations. The chain of interaction is as follows: investor developer customer general contractor subcontractors, contractors.
This is not a mandatory scheme for each facility. The developer can act as a customer or an investor. The customer has the opportunity to conclude contracts with several contractors at the same time. There may be no general contractor at all.
Management company
The management company is the manager of an apartment building. It regulates the creation of a new residential complex with its proper maintenance. The organization's work covers engineering systems, common property, implementation of repairs, cleaning, interaction with residents. Depending on the decisions of the co-owners and agreements, the company's powers are determined.
Functions of the management company
The management company organizes the daily maintenance of the common property. Its functions may include the following:
- cleaning the territory;
- maintenance of joint property;
- organization of current repairs;
- maintenance of engineering systems;
- working with residents' applications;
- interaction with service providers;
- security and access control;
- organizational and financial reporting;
- preparation for seasonal operation.
The managing construction company is not responsible for all defects. In case of problems due to construction violations, the cause is determined, the defect is recorded, and the responsible party is sought.
The management of an apartment building is carried out by co-owners. They can choose the form of management through an apartment building association, transfer basic functions to the manager under a contract. This is provided for by the Law of Ukraine "On the Peculiarities of Exercising Ownership Rights in an Apartment Building."
When does the management company start working?
To plan the work of the staff, assess the needs, the management company can be involved at the beginning of construction. The provision of services, full management of the building depends on the condition of the object, legal basis, and paperwork. In practice, the following scenarios are possible:
- co-owners choose the manager independently;
- at the initial stage of operation, the developer engages a management company;
- co-owners create a condominium;
- Management with the participation of a utility company is used.
The management company is a business entity for the provision of services under the contract. A condominium association is an association of co-owners. It is created for the maintenance, management of a residential complex, and the use of common property. These are different formats of management organization, where co-owners do not lose their rights to real estate from the developer.
The main differences between a developer, a builder and a management company
It is easy to distinguish these participants by their main tasks and stage of work. The main differences are presented in the table.
| Criteria | The developer | Forget Book | Managing company |
| When is it working? | Idea generation stage; project planning | Construction preparation and implementation | House operation |
| Main role | Formation of a financial model, concept | Organization of construction, fulfillment of legal obligations | Organization of maintenance and upkeep of shared property |
| Interaction with the apartment buyer | Marketing, project presentation, support | Fulfillment of obligations to the buyer | Solution after the start of operational management |
| Example of work | Residential complex concept, market analysis, budget | Construction organization, work with contractors | System maintenance, cleaning, organization of repairs |
| Does it participate in the sale of apartments? | Often yes | Can participate | Usually not |
Therefore, it is not necessary that the developer, the builder and the management company are three different legal entities. One company can in practice combine several functions. Therefore, at the stage of purchasing real estate, what is important is not advertising, but specific documents, powers and contractual obligations.
Visnovok
The developer, the builder, and the management company are involved in various processes of the real estate cycle. We have taken a detailed look at the composition of the teams, the main functions, and the mechanisms for managing an apartment building. There are some important practical tips for real estate buyers:
- check the legal name of the company;
- view permits and information about the facility;
- find out who owns the land and their rights;
- do not identify the developer's brand with the company that is responsible for a specific obligation or sells the apartment;
- read the contract carefully before signing;
- Find out who will be doing the maintenance.
If defects are discovered after move-in, we record them in writing. We then contact the party responsible for the specific obligation.
