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

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 Estate’s 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 purchaser’s 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