Alexander Paykin- Construction Disputes That Can Derail Real Estate Deals

Yes.

And this ki-kind of problem can happen anywhere, but there's certain places like New York City where it's gonna be more common, just, just from a, a legal complexity environment, uh, [laughs] limited geography, uh, available.

Uh, you know, it's an island.

Manhattan, as you well know, it's an island.

And so it's, it's unique there, but this is a problem that can happen anywhere.

And I'm sitting here listening to you and your, your big the-- you know, your big theme is, you know, uh, is prevention is the mo- is the way, be easy for me to say.

Prevention is the best way to avoid these kind of co-co, you know, problems.

And I don't know how you do that in this particular area.

See, this is actually the, one of the toughest fields to take the preventive, uh, approach in because very often you have no idea what the problem might be when you're stepping into it.

And you're right, the problem exists everywhere.

It is most prominent and most, um, expectable in places like New York.

The specific characteristics of the places where it's gonna be a peak problem are essentially a slow bureaucracy.

We have that in many, many places.

Um, high carry costs.

So if you've bought a vacant piece of land in the middle of nowhere where the carry costs are a tiny amount of taxes and the land's vacant so there's nothing to insure, and your project's delayed by a year and all you had to do was pay five thousand dollars in property taxes, not the end of the world.

I mean, you froze up whatever capital you were gonna use on other things, but it doesn't quite kill a project.

When you're dealing with New York where the property taxes on that piece of land might be a hundred and fifty thousand a year or more, a one-year delay is unacceptable.

Um-

Mm-hmm

... anytime you're dealing with maintenance, common charges, et cetera, anything where your daily drain is gonna run up a meter that you'll eventually not be able to afford, that's the trigger.

So high carry costs, slow bureaucracies, and slow legal processes.

So New York is the trifecta here.

So in New York, for example, you can end up with mechanics liens from a subcontractor who didn't get paid by a main contractor.

You could end up with complaints from, uh, from neighbors, and not even adjacent neighbors.

You could have neighbors from a block down, two blocks down say, you know, this is...

Yes.

And this ki-kind of problem can happen anywhere, but there's certain places like New York City where it's gonna be more common, just, just from a, a legal complexity environment, uh, [laughs] limited geography, uh, available.

Uh, you know, it's an island.

Manhattan, as you well know, it's an island.

And so it's, it's unique there, but this is a problem that can happen anywhere.

And I'm sitting here listening to you and your, your big the-- you know, your big theme is, you know, uh, is prevention is the mo- is the way, be easy for me to say.

Prevention is the best way to avoid these kind of co-co, you know, problems.

And I don't know how you do that in this particular area.

See, this is actually the, one of the toughest fields to take the preventive, uh, approach in because very often you have no idea what the problem might be when you're stepping into it.

And you're right, the problem exists everywhere.

It is most prominent and most, um, expectable in places like New York.

The specific characteristics of the places where it's gonna be a peak problem are essentially a slow bureaucracy.

We have that in many, many places.

Um, high carry costs.

So if you've bought a vacant piece of land in the middle of nowhere where the carry costs are a tiny amount of taxes and the land's vacant so there's nothing to insure, and your project's delayed by a year and all you had to do was pay five thousand dollars in property taxes, not the end of the world.

I mean, you froze up whatever capital you were gonna use on other things, but it doesn't quite kill a project.

When you're dealing with New York where the property taxes on that piece of land might be a hundred and fifty thousand a year or more, a one-year delay is unacceptable.

Um-

Mm-hmm

... anytime you're dealing with maintenance, common charges, et cetera, anything where your daily drain is gonna run up a meter that you'll eventually not be able to afford, that's the trigger.

So high carry costs, slow bureaucracies, and slow legal processes.

So New York is the trifecta here.

So in New York, for example, you can end up with mechanics liens from a subcontractor who didn't get paid by a main contractor.

You could end up with complaints from, uh, from neighbors, and not even adjacent neighbors.

You could have neighbors from a block down, two blocks down say, you know, this is...