The project is in arrears. What does this mean and how do we handle the situation?
Investing in real estate projects is not a sprint, but rather a marathon. And as with any long-term plan, sometimes a step is delayed. Whether it's a late payment of interest that causes you to lose revenue later or a delayed return of principal when the completion of a project is delayed. Why is this happening?
The project needs more time to be completed successfully
Delaying immediately does not mean that something has gone wrong. It just means the project needs a little more time. In most cases, this is a temporary discrepancy in the cashflow on the part of the developer — for example, he is waiting for payment from his clients, or he has the so-called funds ready, but he cannot immediately dispose of them, for example, due to the custody or approval process of the bank.
Tip: Read, How we protect investors' money in case the client stops repaying.
What can be the delay caused by:
- Waiting for payment
- The cashflow of entrepreneurs is dependent on different incomes. If someone does not pay an invoice or rent to our client on time, then they may be delayed in paying interest.
- The funds can not yet be disposed of
- Sometimes it happens that the client already has money at his disposal, for example, from refinancing or the sale of another property. But he cannot dispose of them yet, because they are, for example, in a lawyer's custody and waiting for all the terms of the agreement to be fulfilled. Only after that the funds will pay off.
- Refinancing
- It may be that it is more profitable for the client to wait until the funds from the refinancing, and then pay the full amount, including interest and penalties for arrears, only at the end of the loan.
- Human factor
- Even entrepreneurs are just people and despite various notifications and notifications from us, it can happen that sometimes someone forgets to send a payment on time.
Tip: At Investown we have a rule for projects in delay: Every client has 90 days to fulfill your obligationsbefore we start taking legal action.
We compensate investors for the delay in earnings
If the project is delayed, a contractual penalty and statutory interest for delay begin to be credited to the client immediately. Thus, investors are entitled to an extra return for each day of delay. We understand that delayed payment of proceeds can be annoying. That is why we compensate investors for waiting for a return in this way.
How high is the contractual penalty for late payment?
- For projects with signed contractual documentation until June 17, 2025, the contractual penalty is 0.2% of the amount owed per day for each day of delay.
- For projects with documentation signed from June 18, 2025, the contractual penalty is 0.1% of the amount owed per day for the first 30 days of delay, then 0.05% per day.
In the first half of 2025, among users with delayed projects, we paid 1.36% more in revenue than planned. In total, they received 1,263,892 CZK more. Despite the temporary As a result of delays, these projects raised a total of CZK 94,467,087 to investors.
The goal is a successfully completed project
At Investown, we rely on close contact with all our clients. We are available to them on the phone basically 24/7. And if something does not go according to plan, then together we come up with a strategy to pay off all obligations and complete the project successfully. In our experience with 350 projects, most interest payment delays are resolved within a few weeks.
What do we do when a project is delayed
- We are in contact with clients daily and remind them that interest or the entire loan is coming due.
- As soon as the project is delayed, we immediately call the client and want to know what the delay is caused by.
- If something is not going as it should, we actively work together to find a solution so that the project continues successfully until complete completion.
- Only then do we proceed to legal action.
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