HOT TOPICS IN REAL ESTATE - PowerPoint PPT Presentation


Title: HOT TOPICS IN REAL ESTATE


1
HOT TOPICS IN REAL ESTATE
  • Presented by Alexander Fane and Olga Rivkin

May 1, 2012
2
  • ZONING AND COMMUNITY AMENITY CONTRIBUTIONS

3
Municipal control of development
  • Creatures of statute
  • Local Government Act
  • Community Charter
  • Stages of involvement with a development
  • Subdivision
  • Land use (to be discussed in this presentation)
  • Development permit
  • Building/occupancy/other permits

4
Land use planning
  • The power to zone is the ability to control what
    can and cannot be done with any particular
    property
  • Discretionary power municipal council makes a
    decision, at its will, provided they follow due
    process and decide in good faith
  • Public participation is required (Not In My
    Backyard)

5
Types of land use bylaws
  • Regional growth strategy
  • Adopted by a regional district
  • Municipal bylaws must be consistent
  • Official community plan
  • Includes a regional context statement
  • Broad stroke land use policy
  • Zoning bylaws must be consistent
  • Zoning Bylaw
  • Per-lot land use bylaw

6
Zoning bylaws
  • Spectrum of discretion
  • Process
  • Three readings
  • Public hearing
  • Adoption
  • no vested rights until adoption

7
Zoning bylaws
  • Key contents
  • Land use
  • residential/commercial/industrial
  • specific lists of uses
  • usually, use is prohibited unless specifically
    permitted
  • Density
  • means (a) the density of use of the land, parcel
    or area, or (b) the density of use of any
    building and other structure
  • Example all buildings and structures together
    must not exceed a gross floor area of 0.9 times
    the lot area (City of Coquitlam - residential)

8
Community Amenity Contributions
  • Three main methods
  • Works and services contributions
  • Density bonusing contributions
  • Voluntary amenity contributions upon rezoning

9
Works and services contributions
  • Rooted in statute (s.938/939/941 LGA s.565 VC)
  • Requirement to pay for works and services that
    are needed to serve a new development
  • Excess or extended services
  • Development cost charges/development cost levies

10
Density bonusing
  • Rooted in statute (s.904 LGA/s.565.1 VC)
  • Density cannot be varied by a permit
  • Authority to require community amenities in
    return for bonus density
  • Base density by bylaw
  • Exceed base density in return for community
    amenities
  • Example base density 2.5 times the lot area
    to achieve additional density of 0.5 times the
    lot area, a contribution of 75 of the land value
    of the additional density is required

11
Voluntary amenity contributions
  • No statutory basis
  • Rooted in discretion to rezone
  • Cannot enter into an agreement to rezone (other
    than a phased development agreement)
  • Often negotiated after third reading, prior to
    final adoption (remember, no vested rights!)

12
Voluntary amenity contributions
  • Example Vancouver (Community Amenity
    Contributions Through Rezonings)
  • Mix of density bonusing and voluntary
    contributions
  • Standard rezonings flat rate of 3 per square
    foot of additional floor space
  • Non-standard rezonings negotiations on a
    site-by-site basis (usually includes engineering
    analysis, market analysis, financial analysis
    etc. to determine the lift in land value as a
    result of rezoning

13
Due diligence
  • Extent, timing and opportunities
  • How far along is the transaction
  • Nature of client
  • Nature of development, vendor, location

14
Due Diligence
  • Initial considerations
  • who is the owner
  • share or asset transaction
  • title review
  • Restrictive Covenants
  • Mineral Tenures
  • ALR
  • Airport

15
Due Diligence
  • Standard Searches
  • Zoning
  • CRA
  • Bankruptcy
  • Corporate
  • Employment
  • Employment Standards Branch
  • Workers Compensation Board

16
Due Diligence
  • Standard searches continued
  • Environmental Management Act (British
    Columbia)
  • Site Registry
  • Phase 1, Phase 2
  • Riparian
  • Material leases or land use agreements
  • First Nations

17
Origins of REDMA
  • Real Estate Development Marketing Act (REDMA)
    brought into force on January 1, 2005
  • Replaces Part 2 of Real Estate Act. Real Estate
    Services Act Replaces Part 1 of the Real Estate
    Act.
  • REDMA governs marketing, sales, and long-term
    leases of development units
  • When considering REDMA, also consider regulations
    and the Superintendent of Real Estates 15 Policy
    Statements

18
Overview of REDMA
  • Mechanics of REDMA
  • No marketing without a disclosure statement
    (Section 3(c))
  • Disclosure statement must
  • Be in the form and content required by the
    superintendent
  • Without misrepresentation, plainly disclose all
    material facts
  • Set out the substance of a purchasers rights to
    rescission as provided under Section 21 and
  • Be signed as required by the Regulations
  • (Section 14(2))

19
Overview of REDMA
  • Material Fact Means in relation to a
    development unit or development property, any of
    the following
  • (a) a fact, or proposal to do something, that
    affects, or could reasonably be expected to
    affect, the value, price or use of the
    development unit or development property
  • (b) the identity of the developer
  • (c) the appointment, in respect of the
    developer, of a receiver, liquidator or trustee
    in bankruptcy, or other similar person acting
    under the authority of a court
  • (d) any other prescribed matter.

20
Overview of REDMA
  • Mechanics of REDMA
  • If a developer becomes aware that a disclosure
    statement does not comply with REDMA, or contains
    a misrepresentation, the developer must
    immediately file with the superintendent
  • (i) a new disclosure statement, or
  • (ii) an amendment to the disclosure
    statement
  • (Section 16)

21
Overview of REDMA
  • Mechanics of REDMA
  • New Disclosure Statement Required if
  • Is respecting a matter set out in paragraph (b)
    or (c) of the definition of Material Fact (the
    identity of the developer or the appointment of a
    receiver, liquidator or trustee in bankruptcy,
    does not apply to CCAA Proceedings)
  • Is respecting a matter set out in paragraph (d)
    of Material Fact (any other prescribed matter
    (Policy Statements?))
  • Is of such a substantial nature that the
    superintendent gives notice to the developer that
    a new disclosure statement must be filed (has not
    happened)

22
Overview of REDMA
  • Mechanics of REDMA
  • A developer must file an amendment to a
    disclosure statement in any case where a new
    disclosure statement is not required
  • Paragraph (a) Material Fact
  • a fact or proposal to do something, that
    affects, or could reasonably be expected to
    affect, the value, price or use of the
    development unit or development property.
  • disclose all Material Facts or agreement not
    enforceable against purchasers.

23
Overview of REDMA
  • Mechanics of REDMA
  • New Disclosure Statement Right of rescission
  • Amendment to Disclosure Statement No right of
    rescission
  • (Section 21)
  • A promise or an agreement to purchase or lease a
    development unit is not enforceable against a
    purchaser by a developer who has breached any
    provision of Part 2 Marketing and Holding
    Deposits
  • (Section 23)

24
Overview of REDMA
  • Practical Application
  • Risks
  • When and what to disclose
  • Overview of sales centre

25
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HOT TOPICS IN REAL ESTATE

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Title: HOT TOPICS IN REAL ESTATE


1
HOT TOPICS IN REAL ESTATE
  • Presented by Alexander Fane and Olga Rivkin

May 1, 2012
2
  • ZONING AND COMMUNITY AMENITY CONTRIBUTIONS

3
Municipal control of development
  • Creatures of statute
  • Local Government Act
  • Community Charter
  • Stages of involvement with a development
  • Subdivision
  • Land use (to be discussed in this presentation)
  • Development permit
  • Building/occupancy/other permits

4
Land use planning
  • The power to zone is the ability to control what
    can and cannot be done with any particular
    property
  • Discretionary power municipal council makes a
    decision, at its will, provided they follow due
    process and decide in good faith
  • Public participation is required (Not In My
    Backyard)

5
Types of land use bylaws
  • Regional growth strategy
  • Adopted by a regional district
  • Municipal bylaws must be consistent
  • Official community plan
  • Includes a regional context statement
  • Broad stroke land use policy
  • Zoning bylaws must be consistent
  • Zoning Bylaw
  • Per-lot land use bylaw

6
Zoning bylaws
  • Spectrum of discretion
  • Process
  • Three readings
  • Public hearing
  • Adoption
  • no vested rights until adoption

7
Zoning bylaws
  • Key contents
  • Land use
  • residential/commercial/industrial
  • specific lists of uses
  • usually, use is prohibited unless specifically
    permitted
  • Density
  • means (a) the density of use of the land, parcel
    or area, or (b) the density of use of any
    building and other structure
  • Example all buildings and structures together
    must not exceed a gross floor area of 0.9 times
    the lot area (City of Coquitlam - residential)

8
Community Amenity Contributions
  • Three main methods
  • Works and services contributions
  • Density bonusing contributions
  • Voluntary amenity contributions upon rezoning

9
Works and services contributions
  • Rooted in statute (s.938/939/941 LGA s.565 VC)
  • Requirement to pay for works and services that
    are needed to serve a new development
  • Excess or extended services
  • Development cost charges/development cost levies

10
Density bonusing
  • Rooted in statute (s.904 LGA/s.565.1 VC)
  • Density cannot be varied by a permit
  • Authority to require community amenities in
    return for bonus density
  • Base density by bylaw
  • Exceed base density in return for community
    amenities
  • Example base density 2.5 times the lot area
    to achieve additional density of 0.5 times the
    lot area, a contribution of 75 of the land value
    of the additional density is required

11
Voluntary amenity contributions
  • No statutory basis
  • Rooted in discretion to rezone
  • Cannot enter into an agreement to rezone (other
    than a phased development agreement)
  • Often negotiated after third reading, prior to
    final adoption (remember, no vested rights!)

12
Voluntary amenity contributions
  • Example Vancouver (Community Amenity
    Contributions Through Rezonings)
  • Mix of density bonusing and voluntary
    contributions
  • Standard rezonings flat rate of 3 per square
    foot of additional floor space
  • Non-standard rezonings negotiations on a
    site-by-site basis (usually includes engineering
    analysis, market analysis, financial analysis
    etc. to determine the lift in land value as a
    result of rezoning

13
Due diligence
  • Extent, timing and opportunities
  • How far along is the transaction
  • Nature of client
  • Nature of development, vendor, location

14
Due Diligence
  • Initial considerations
  • who is the owner
  • share or asset transaction
  • title review
  • Restrictive Covenants
  • Mineral Tenures
  • ALR
  • Airport

15
Due Diligence
  • Standard Searches
  • Zoning
  • CRA
  • Bankruptcy
  • Corporate
  • Employment
  • Employment Standards Branch
  • Workers Compensation Board

16
Due Diligence
  • Standard searches continued
  • Environmental Management Act (British
    Columbia)
  • Site Registry
  • Phase 1, Phase 2
  • Riparian
  • Material leases or land use agreements
  • First Nations

17
Origins of REDMA
  • Real Estate Development Marketing Act (REDMA)
    brought into force on January 1, 2005
  • Replaces Part 2 of Real Estate Act. Real Estate
    Services Act Replaces Part 1 of the Real Estate
    Act.
  • REDMA governs marketing, sales, and long-term
    leases of development units
  • When considering REDMA, also consider regulations
    and the Superintendent of Real Estates 15 Policy
    Statements

18
Overview of REDMA
  • Mechanics of REDMA
  • No marketing without a disclosure statement
    (Section 3(c))
  • Disclosure statement must
  • Be in the form and content required by the
    superintendent
  • Without misrepresentation, plainly disclose all
    material facts
  • Set out the substance of a purchasers rights to
    rescission as provided under Section 21 and
  • Be signed as required by the Regulations
  • (Section 14(2))

19
Overview of REDMA
  • Material Fact Means in relation to a
    development unit or development property, any of
    the following
  • (a) a fact, or proposal to do something, that
    affects, or could reasonably be expected to
    affect, the value, price or use of the
    development unit or development property
  • (b) the identity of the developer
  • (c) the appointment, in respect of the
    developer, of a receiver, liquidator or trustee
    in bankruptcy, or other similar person acting
    under the authority of a court
  • (d) any other prescribed matter.

20
Overview of REDMA
  • Mechanics of REDMA
  • If a developer becomes aware that a disclosure
    statement does not comply with REDMA, or contains
    a misrepresentation, the developer must
    immediately file with the superintendent
  • (i) a new disclosure statement, or
  • (ii) an amendment to the disclosure
    statement
  • (Section 16)

21
Overview of REDMA
  • Mechanics of REDMA
  • New Disclosure Statement Required if
  • Is respecting a matter set out in paragraph (b)
    or (c) of the definition of Material Fact (the
    identity of the developer or the appointment of a
    receiver, liquidator or trustee in bankruptcy,
    does not apply to CCAA Proceedings)
  • Is respecting a matter set out in paragraph (d)
    of Material Fact (any other prescribed matter
    (Policy Statements?))
  • Is of such a substantial nature that the
    superintendent gives notice to the developer that
    a new disclosure statement must be filed (has not
    happened)

22
Overview of REDMA
  • Mechanics of REDMA
  • A developer must file an amendment to a
    disclosure statement in any case where a new
    disclosure statement is not required
  • Paragraph (a) Material Fact
  • a fact or proposal to do something, that
    affects, or could reasonably be expected to
    affect, the value, price or use of the
    development unit or development property.
  • disclose all Material Facts or agreement not
    enforceable against purchasers.

23
Overview of REDMA
  • Mechanics of REDMA
  • New Disclosure Statement Right of rescission
  • Amendment to Disclosure Statement No right of
    rescission
  • (Section 21)
  • A promise or an agreement to purchase or lease a
    development unit is not enforceable against a
    purchaser by a developer who has breached any
    provision of Part 2 Marketing and Holding
    Deposits
  • (Section 23)

24
Overview of REDMA
  • Practical Application
  • Risks
  • When and what to disclose
  • Overview of sales centre

25
(No Transcript)
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