TOOL 1.3
RESIDENTIAL DEVELOPERS
| Business | • Problems at major suppliers • Major upward shift in price of key inputs (raw materials, components, utilities) or availability problems • Loss of key personnel • Major acquisition/divestment • Significant increase in or change in nature of competition • Slow sales compared to plan • No evidence of contracted sales • Small deposits • Price reductions/special offers • Oversupply in location • New legislation/regulations • Tax/fiscal changes • Change in economic conditions (growth/recession, exchange rates, interest rates) • Claims on warranties/guarantees/service agreements • Product quality problems • Legal action being taken by or against client • Disputes • Competitors/peers in problems • Sector specific issues (eg labour disputes) • Negative press/media reports • Rumours • Collapse/rapid change in share price • Build costs overrunning budgets • Seeking variations to planning permission • Delaying payments to sub contractors • No contingencies in the budget • Eating into contingency funds • Too many projects • Too big a project • How much marketing has to be done • “Gung ho” developer |
| Management | • Changes of senior management (especially if unexpected) • Lack of strategic plan • Frequent strategy changes • One man show • Management skills/time overstretched • Track record of developer shows lack of experience • Due diligence on prime movers not undertaken with vigour • No evidence of full management team • Lack of communication with client • Lack of succession • Complex corporate structure • Arrogant behaviour towards funders, creditors, media • Unwillingness to provide information • Lack of openness/honesty • “Trophies” – new head offices, expensive sponsorships, ownership of sports teams etc. • Poor labour relations • Lack of experience mix • Remuneration/lifestyle |
