HOT TOPICS IN REAL ESTATE
Presented by Alexander Fane and Olga
Rivkin
May 1, 2012

• ZONING AND COMMUNITY AMENITY
CONTRIBUTIONS

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

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”)

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

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

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)

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

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

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

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!)

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-bysite basis (usually includes engineering analysis, market analysis, financial analysis etc. to determine the “lift” in land value as a result of rezoning

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

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

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

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

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 Estate’s 15 Policy Statements

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 purchaser’s rights to rescission as provided under Section 21; and
 Be signed as required by the Regulations
(Section 14(2))

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.

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)

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)

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.

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)

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