Question

Many substandard condo developments have been built by small corporations that declare bankruptcy or go out of business when legal actions are started against them by condo buyers. What legal remedies might reduce this moral hazard​ problem? Legal remedies that might reduce moral hazard among small corporations that build condos include A. prohibiting these builders from receiving deferred payments. B. excluding these builders from insurance mandates. C. providing limited liability for these builders who incorporate. D. required these builders to post a surety bond. E. establishing wage maximums that these builders can be paid.

Answer 1

required these builders to post a surety bond.

Explanation:-

A protection bond is described as just a three-party deal that technically bonds a contractor in need of the security, an obligatory in need of the bond and a security firm that markets the security. The contract promises that the trustee must behave according to certain legislation.

Therefore, a protection guarantee would be provided in the statutory remedy that just might minimize specific incentives for small condo-building companies.

If I'm considering purchasing a house in such a new facility, a few of the developer 's features would make purchasing more probable are his credibility on the industry as well as his regulatory compliance the specifics of the apartment.