The construction industry has been facing a wave of bankruptcies for some time now. When the developer of a new property goes bankrupt in the middle of building, it can be a nightmare for home buyers. In the worst-case scenario, the buyer may not have a new home to move into and could lose large sums of money.
The protection that buyers receive is limited and can leave them vulnerable in difficult situations. One option is for buyers to continue with the project themselves, but there are additional costs involved and no guarantees that they will succeed.
One alternative is to purchase insurance or non-performance guarantees that cover errors found after construction has begun. However, these guarantees often have deductibles and limitations on compensation amounts.
Another option is to hire an auditor who can monitor transactions in the purchase price accounts and ensure that payments are being used specifically for the construction of the object in question. This can provide added security for buyers, but it is still not foolproof against fraudulent behavior by builders or developers.