On-Site & Off-Site Property Development Management Agreement
This Agreement sets out the standard terms under which Blue Diamond Development Inc. performs on-site and off-site property development management services for property owners. Specific projects are engaged through a Project Order that incorporates these terms by reference.
Engagement of Manager
This On-Site and Off-Site Property Development Management Agreement (the “Agreement”) sets out the standard terms under which Blue Diamond Development Inc. (“Manager,” “BDDI”) performs on-site and off-site real-estate development management services for an Owner. A specific Project is engaged through a Project Order or Statement of Work that incorporates these terms by reference.
Manager is engaged as the Owner’s professional development manager. Manager is not a general contractor unless expressly engaged as one in a separate written contract.
Project Definition
The Project Order will identify (a) the property address and legal description, (b) the project program (number and type of units, square footage, parking, amenities), (c) the project budget, (d) the project schedule with key milestones, (e) the agreed Manager fee, (f) any incentive fee and the milestones that earn it, and (g) any special terms applicable to the Project.
On-Site Services
On-site services may include:
- Field representation, including project meetings, site walks, and inspections;
- Coordination of design professionals, contractors, and consultants;
- Schedule oversight and reporting;
- Cost and pay-application review;
- Quality and compliance oversight, including punch-list management;
- Safety oversight and OSHA compliance liaison;
- Permit, inspection, and certificate-of-occupancy coordination;
- Lien management and waiver collection;
- Owner reporting through written progress updates and monthly project reports.
Off-Site Services
Off-site services may include:
- Site selection and feasibility analysis;
- Acquisition due diligence (zoning, title, environmental, geotechnical, utility, traffic);
- Capital structuring and lender liaison;
- Design management and value engineering;
- Bid solicitation, contractor selection, and contract negotiation;
- Budget development and oversight;
- Risk management and insurance coordination;
- Lease-up planning and stabilized hand-off coordination;
- Investor reporting and capital-call administration on Owner’s behalf.
Standard of Care
Manager will perform Services with the degree of skill and care ordinarily exercised by experienced and qualified development managers performing similar services on similar projects in the same general region under similar circumstances, consistent with applicable laws and industry standards.
Owner Responsibilities
Owner will, at Owner’s expense, (a) provide site control and access, (b) procure project-required insurance as set out in our Insurance and Liability Policy, (c) procure or cause to be procured construction financing and all equity capital, (d) execute all design contracts, construction contracts, and consulting contracts in Owner’s name (Manager will execute as agent only when expressly authorized), (e) deposit funds with the construction lender or in a project account from which Manager will disburse, (f) timely review and respond to requests for decisions, and (g) comply with applicable law.
Authority and Limits
Manager may take routine actions on Owner’s behalf within the agreed budget and schedule. Manager will obtain Owner’s prior written approval for (a) any change in scope, (b) any change order in excess of $25,000 or such other threshold stated in the Project Order, (c) any contract with a single contractor or vendor exceeding $250,000, (d) any settlement of a claim or dispute, and (e) any waiver of a material lender, insurer, or governmental requirement. Owner authorizes Manager to take any action reasonably necessary to address an emergency that threatens life, safety, or material property value, with prompt notice to Owner.
Compensation
Manager’s fee is the amount stated in the Project Order, generally either (a) a percentage of total project cost, (b) a fixed monthly fee, or (c) a hybrid. Reimbursable expenses (travel, lodging, courier, reproduction, third-party reports, special software) are passed through at cost. Incentive fees, if any, are earned only on achievement of the milestones stated in the Project Order.
Mechanic’s Liens, Bonding, and Subcontractor Flow-Down
Manager will administer the lien-waiver process in accordance with applicable state mechanic’s-lien statutes. Conditional and unconditional waivers will conform to the form prescribed by the applicable statute (such as California Civil Code § 8132 et seq., Texas Property Code Chapter 53, Florida Statutes Chapter 713, and corresponding statutes elsewhere). Where bonds are required, Manager will require performance and payment bonds in the form, amount, and surety acceptable to the Owner and lender. All construction subcontracts will include flow-down terms covering insurance, indemnification, lien waiver, safety, change-order procedure, and dispute resolution consistent with this Agreement.
Substantial Completion, Final Completion, and Punch List
Manager will administer the substantial-completion process in accordance with the standards of the American Institute of Architects (AIA) Document A201 and similar industry forms. Substantial Completion is reached when the Project is sufficiently complete that the Owner can occupy and use the Project for its intended purpose, with only minor punch-list items remaining. Final Completion is reached when all punch-list work is completed, all closeout documents have been delivered, and final lien waivers have been received. Warranty periods commence on the date of Substantial Completion unless the construction contract provides otherwise.
Latent Defects and the Spearin Doctrine
For latent defects discovered after Substantial Completion, the warranty terms of the construction contract control. Manager applies the Spearin doctrine where applicable: a contractor who builds in accordance with plans and specifications provided by the Owner is not liable for defects in the design itself, except where the contractor was negligent in implementation or had express duty to verify the design. Manager assists the Owner in evaluating which party bears responsibility under this doctrine.
Compliance Programs
Manager will administer compliance programs covering OSHA, environmental laws (CERCLA, RCRA, Clean Water Act, Clean Air Act, NEPA), prevailing-wage laws (Davis-Bacon, state Little Davis-Bacon Acts), Equal Employment Opportunity laws, fair-housing laws, ADA, building codes, energy codes, and applicable local ordinances. Compliance does not transfer ultimate legal responsibility from the responsible licensee to Manager.
Records and Reporting
Manager will maintain project books and records in good order for a period of seven (7) years after project completion. Owner has audit rights at Owner’s expense on reasonable advance notice during normal business hours.
Termination
Either party may terminate the Project for material breach with thirty (30) days’ written notice and opportunity to cure. Owner may terminate for convenience on thirty (30) days’ written notice subject to payment of all fees and expenses accrued through the effective date of termination plus any committed third-party costs that cannot reasonably be cancelled. Manager may terminate for non-payment after fifteen (15) days’ written notice if payment is not cured.
Insurance
The insurance requirements set out in our Insurance and Liability Policy apply to every Project under this Agreement.
Limitation of Liability and Indemnification
The limitation of liability and indemnification provisions of our Terms of Service apply to this Agreement, including the cap of liability at the lesser of fees paid in the prior twelve months for the Project or available insurance.
Dispute Resolution
Disputes are resolved as set out in our Terms of Service: informal negotiation, mediation, then binding arbitration administered by the American Arbitration Association under its Construction Industry Arbitration Rules in Cheyenne, Wyoming. Wyoming substantive law governs unless a non-waivable mandatory provision of the project state requires otherwise.
Independent Contractor; No Joint Venture
Manager is an independent contractor. Nothing in this Agreement creates a partnership, joint venture, or fiduciary relationship between Owner and Manager.
Compliance Across States
This Agreement is enforceable in every state and territory in which we provide development management services. Where applicable state law mandates a particular contractor licensing, real-estate licensing, or owner-representative licensing condition, Manager will operate consistent with that state’s mandate, including licensure or affiliation arrangements where required.
Notices and Counterparts
Notices are effective as set out in our Terms of Service. The Project Order may be executed in counterparts, including electronic counterparts under our E-Sign Consent.
Contact Us
Blue Diamond Development Inc.
Attention: Project Operations
1501 South Greeley Highway, Suite C-3022, Cheyenne, WY 82007
Phone: (888) 851-1477
Email: derrick@bluediamonddevelopinc.com
Conflicts of Interest
Manager will disclose any material conflict of interest of which it becomes aware. Manager and its Affiliates may have ongoing relationships with general contractors, subcontractors, vendors, lenders, investors, and other industry participants. Manager will use commercially reasonable efforts to procure best value for Owner and will disclose any material economic interest in any contract that Manager negotiates on Owner’s behalf. Where Manager or an Affiliate provides goods or services priced above arm’s-length market rates, prior written approval from Owner is required.
Developer Fees and Promote Allocations
Where Manager acts as a co-sponsor or co-developer in addition to its development management role, the developer fee, promote, and equity arrangements are addressed in a separate joint-venture, operating, or partnership agreement. Nothing in this Agreement modifies any such separate agreement, and the development manager fee under this Agreement is in addition to any developer fee or promote earned through equity participation, except where the parties expressly agree to offset.
Site Conditions and Differing Site Conditions
Manager will administer the differing-site-conditions process under the construction contract. The general approach follows AIA Document A201 § 3.7.4: if the contractor encounters subsurface conditions that differ materially from those indicated in the contract documents or that are unknown physical conditions of an unusual nature, the contract sum and time may be equitably adjusted. Manager will require the contractor to provide prompt written notice of any differing site condition and will validate the condition through site observation and consultation with the geotechnical engineer of record before authorizing any change order.
Permits, Inspections, and Certificate of Occupancy
Manager will track permit applications, inspection schedules, and certificate of occupancy issuance. Permit fees, plan-review fees, impact fees, traffic-mitigation fees, school-impact fees, and similar governmental fees are paid by Owner unless the construction contract assigns them to the contractor. Manager will assist with appeals of permit denials, code interpretations, and inspection results where the underlying issue creates a material schedule or cost impact.
Governmental Approvals, Entitlements, and Land Use
Manager will coordinate with Owner’s land-use counsel and consultants on rezoning, comprehensive-plan amendments, special-use permits, conditional-use permits, variances, plat approvals, traffic-impact analyses, environmental-review processes (including state and local equivalents of NEPA), historic-preservation review, design-review board hearings, and subdivision approvals. Manager does not act as the legal representative for entitlement matters and does not appear before adjudicative bodies on Owner’s behalf except where expressly authorized.
Sustainability and Green Building Standards
Where the Project is targeting LEED, Enterprise Green Communities, NGBS, ENERGY STAR Multifamily, Living Building Challenge, Passive House, or another green-building certification, Manager will coordinate with the certification consultant and integrate certification requirements into the design and construction documents. Achievement of any specific certification level depends on factors outside Manager’s exclusive control and is not guaranteed.
Owner Indemnity for Pre-Existing Conditions
Owner indemnifies Manager from and against claims arising from any pre-existing condition of the Property (including without limitation contamination, encroachment, easement violation, structural defect, code-compliance issue, or unrecorded condition), to the extent the condition was not caused or aggravated by Manager. This indemnity is in addition to and not in lieu of the indemnities in our Terms of Service.
Records and Audit Rights
Manager will maintain Project records in good order for seven (7) years following Project Final Completion. Owner has the right, on at least thirty (30) days’ written notice and at Owner’s expense, to audit those records during normal business hours. Manager will reasonably cooperate with Owner’s auditor. If an audit reveals an overcharge of more than three percent (3%) of the audited amount, Manager will reimburse Owner’s reasonable audit fees in addition to the overcharged amount.