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Construction projects often require change orders to address modifications that arise during the building process, which can involve adjustments to scope, materials, or contract terms. While change orders are nearly inevitable, they can be minimized through meticulous planning, realistic cost assessments, and maintaining clear communication between all parties involved in the construction project.

With the ability to effectively centralize and compare the budget, contracts, and costs, a developer can prevent future issues on a development project.

Construction loans come in several varieties including land development loans, commercial real estate loans, and residential construction loans, each with specific requirements for securing and disbursing funds based on project progress. These loans carry higher risks than traditional loans and require careful monitoring through mechanisms like progress payments and retainage, with lenders implementing strict procedures to control fund disbursement and ensure project completion.

The only definitive way to keep your loan-funded construction project safe from fraud is to closely track all of its aspects. However, that’s easier said than done. Here are some ways to prevent construction loan fraud.

Take a tour of the most expensive condos in the United States, from penthouses in the Upper East Side to duplexes in SoHo.

On-site inspections are an essential part of a construction loan. These inspections, though sometimes seen as burdensome by contractors, protect both capital partners and borrowers by ensuring work quality and schedule adherence through detailed reports.

Canadian real estate development projects are subject to complex tax requirements, including GST/HST and PST, with certain exemptions for things like undeveloped land and low-income housing projects. Tracking these taxes requires careful record-keeping and specialized software like Rabbet, which can automatically calculate tax rates, track exempt status, and ensure compliance across project budgets and accounting systems.

A draw request is a borrower's request for funds that requires submitting a comprehensive package of documents. These packages can contain hundreds of documents that need careful review and approval, which is tasked to construction loan administrators.

Construction projects require contingency funds to cover unexpected expenses like weather delays, cost overruns, and design errors, making it a crucial component of project risk management. Tracking contingency usage and understanding why it's being used helps developers manage current projects more effectively and better plan for future ones.