Hi there. If you were to proceed, I would insist upon the following with respect to the $20,000 fee...1) first, that it be treated as a deposit and put in an escrow account with an independent escrow agent, such as a title company or law firm, so that if the building doesn't get built and these guys go under, you don't lose the $20,000; 2) second, that it be totally refundable if the building does not get built within some specified period of time...I would actually set more deadlines, so that if the building is not getting built timely that you don't have to wait until the final date when everyone can see it isn't going to get built; 3) that if the building does get built and you do actually move in....that this deposit is credited toward either rent or tenant imrovements.
I hope this has given you the guidance you were seeking. I wish you the best of luck!
The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.
I would recommend that you not proceed. These are the kind of projects that never get done and all these up front fees get lost. I have seen these kinds of things so often over the last 30 years and they all end up badly. This thing is obviously undercapitalized if they need to use your fees to build it. Projects being done by experienced developers that are properly capitalized don't require these kinds of fees...which are ridiculous. MY advice is to say NO and save your $20,000 ...I guarantee you if you put this up, you will have lost it....this project is not likely to get done. Obviously they don't have their bank financing lined up.
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