How do developers purchase land?

[trust]

When a developer is looking to build a condo tower, they remove themselves partially from any liability.

My question is:

For example, when a developer has found a site, do they purchase the land with a company, and then lease it to another company they have formed to develop it? Is that correct?

So if they have legal or financial issues during pre-sales or construction, the original company that owns the land is not liable.

Can anybody help me out (for my final project)?

 

[Observer Walt]

I'm not aware that it is done exactly as you describe, but it is indeed common, in fact almost always the case, that a large developer will form a new company to take ownership of each parcel of land and proceed with the project. If there are any problems with that particular project (for example, construction liens filed against the property because of some dispute over payment), only the one property will be affected. Each company will be dissolved once the project is completed and sold.

As an example, using a sale which recently closed: Aspen Ridge, a large developer with a number pf projects under way, recently purchased the property at 77 Charles Street West. The name of the company which took title is: Aspen Ridge (77 Charles St. Design Build) Ltd.
Legally, this company is separate from any other Aspen Ridge operations.

Hope that's relevant to what you need.