If we do not feel strong
or have no time to control the construction of the house, we can use the help
of a professional - substitute investor. It
is a person or company that acts on our behalf and in our interest. The investor's task is to organize and
coordinate the construction process.
The substitute investor
is our partner who on our behalf will ensure the construction of the house and
related formalities. We do not
have to worry about anything and be a guest on the construction site, because
the substitute investor will deal with all official matters on our behalf (eg get permission to start
construction, use permit or occupancy permit) and ensure the construction
process.
Who can be a replacement
investor?
A substitute investor
can be either a natural person or an entrepreneur. This function can also be performed by
the construction manager or designer. It
is important that he has knowledge and experience in managing the construction
process.
Responsibilities of the
substitute investor
The scope of the
substitute investor's duties depends on how the investment replacement
agreement is constructed. We can
entrust a substitute investor with the performance of all legal actions and
services belonging to our duties. His
tasks also include the preparation of material proposals, preparation of a cost
estimate, work schedule and material supplies. A substitute investor can also
purchase building materials, organize equipment and hire appropriate teams with
contractors, while controlling the costs and quality of services. Of course, the substitute investor
must make all decisions in consultation with the investor. It should also inform him about the
course of the investment, and in particular about the circumstances threatening
its proper implementation. It
also has the obligation to obtain the consent of the direct investor every time
to change the method of performing the activities covered by the investment
substitution contract and to change the method of executing the investment set
out in the project documentation. The
substitute investor is obliged to give the direct investor everything that he
has obtained for him by executing a contract for him (eg building materials or
equipment) and most importantly, after completion, hand over the construction
works (facility) together with the relevant documentation required by the
regulations.
However, it is the
direct investor's responsibility to finance the whole investment process, pay
the remuneration and reimburse the costs incurred to the substitute investor and release
the substitute investor from the obligations that he has incurred on his own behalf in order to
implement the investment.
Responsibilities of the
substitute investor
It is the responsibility
of the substitute investor to ensure the proper course of the investment, and
not to achieve the result in the form of its implementation - therefore it is
responsible for both non-performance and improper performance of the activities
specified in the contract. In the
event of failure to exercise due diligence in the performance of contractual
obligations, the substitute investor is liable for damage to the direct
investor arising as a result. Of
course, he can defend himself, but he has to prove that the damage he suffered
despite performing his duties carefully and could not remove them or prevent
their effect.
What can not be allowed
to a substitute investor
The substitute investor
can not make useless expenditures, especially those exceeding the amount
specified in the investment documentation. He
must not use the investor's property and money in his own interest.
The cost of employing a
substitute investor
Remember that the
substitute investor does not work for free. The
costs that will have to be incurred for servicing the investment with the
support of the substitute investor are in the range of 5 to 10% of the total
value of construction works in the whole project.
