News

On 22 May 2018, the VEGAS LEX law firm, with the support of the Russian Guild of Property Managers and Developers, held a seminar on the topic "Technical supervisor / fee-developer in development projects: recommended practices".

Igor Chumachenko, Partner, Head of Real Estate, Land & Construction practice at VEGAS LEX, delivered introduction and, afterwards, revealed insights into the concept, function and role of technical supervisor / fee-developer in the relations under a general construction contract. The speaker highlighted the possible schemes of contractual structures, and the structure, options and qualification of contractual relations, the responsibilities of the parties to the general contractor contract and the role of technical supervisor / fee-developer in this relationship system. "Technical supervisor (fee-developer) is one of the key players in the general contracting relationship system, especially where the developer does not have its own customer service. In particular, taking into account the latest changes to the Town Planning Code, the technical supervisor must be a member of the relevant self-regulatory organization (SRO), and the functions of developer may be delegated to it. In this regard, it is extremely important to build a system of relations between participants based on the balance of their interests, allocation of risks and responsibility", – the speaker noted.

Maxim Grigoryev, Partner, Head of special projects at VEGAS LEX, spoke about the structure of relations between developer (property developer/customer) and technical supervisor (fee-developer). The speaker provided prime examples from judicial practice and explained what needs to be provided for in a contract with technical supervisor. According to Maxim, notwithstanding the wording existing in the Civil Code of the Russian Federation, from a practical perspective, the functions of technical supervisor are not clearly defined yet. "At present, the practice in this field is just developing. The laws contain certain legal conflicts that make this issue more complicated", – the expert noted.

Vera Setskaya, President of the development and consulting company GVA Sawyer, put emphasis in her speech on the practical aspects of a contract with fee-developer: conditions of remuneration of technical supervisor, budget and project schedule management, responsibility of developer, project risk management, etc.

Yuriy Volkov, Head of Insurance Council LLC, spoke about the technical supervisor liability insurance due to causing harm to third parties (under article 60 of the Civil Code of the Russian Federation) and improper performance of a contractor contract (under article 60 of the Civil Code of the Russian Federation only). He also highlighted the specifics of insurance of a construction facility and outlined the possible issues in an insurance contract.

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