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My closing words in yesterday’s blog were:
I’m waiting to talk with the Municipal Government because the Subdivision Agreement, Schedule ‘M’ Clause 39 says: “That the owner constructs a board on board wood fence around the perimeter of the lands to a height of not less than 2m and otherwise permitted under the Towns fence by-law, PRIOR TO OCCUPANCY OF ANY DWELLING ON THE LAND” (emphasis mine).
Yet today, this guy is “forcing his buyer’s to accept Occupancy” and live in the middle of a construction site WHILE FAILING TO COMPLY WITH THE SUBDIVISION AGREEMENT!
So today I want to deal with the “Subdivision Agreement“.
Unlike in downtown Toronto’s concrete jungle, buying a “detached home” is something quite different in many regards, and with the distinct constant attempt to “fleece the buyer” by the developer.
As a buyer, we and many of our to-be neighbours remain absolutely convinced on the “location“!
You may have heard this already but for everyone to be on the same page, “They say there are three key important elements in any real estate transaction . . . . . . “location, location, and location“!
A few years back, following decades on hands-on experience in Toronto’s luxury condo market and introducing “Buyer Agency” to Toronto I was forced to change that famous saying to “ . . . . . developer, location, location“!
You see a condo being built by a poor or unscrupulous developer in an excellent location of all excellent locations, will turn your dreams into nightmares every time in Condoland.
Apparently that applies to everywhere else too!
Remember my key “by-line” for decades: “Believe nothing that you hear and half of what you see in Condoland“. Well, that also exists everywhere else that I’ve researched looking for quality condo investments.
So, to get back onto today’s blog topic, the “Subdivision Agreement“, let me draw you a quick sketch of how things are done out here in detached home (“POTL” – a type of condo) land.
A developer buys a parcel of land and applies their and their lawyer’s skill, knowledge and ability to divide up that land and get this proposed division of the land approved by the Municipal Government (through various other agencies – this is only a snap shot).
Once the developer gets his approvals to divide up the land, based on a “site plan” that he submitted with his original proposal, the Municipal Government works through any issues with the developer and accepts it as a “Registered Subdivision Site Plan” based on entering into a lengthy (50 legal pages) and comprehensive document called a “Subdivision Agreement“.
In our case, the developer chose to not fully develop and build the small collection of estate homes himself, so he then sold the land with all “improvements” he had introduced (subdivision approvals) to a home builder.
This home builder can be anyone with the money to pay the developer his price and who is willing to undertake a contract with the developer to insure that everything that they are intending to build, complies with all Municipal Codes, etc. and all requirement specifically between the developer and the builder.
The builder then pre-sells each lot with the buyer’s choice of model depending on site-specific lots for certain models.
In this case, included with the documents supplied waer the required Agreement of Purchase and Sale between the builder and consumer, plus a mandatory Tarion Amendment which forms a part of this Agreement.
No copy of the Subdivision Agreement was presented or made available despite my requests, the Rules & Regulations regarding the POTL (stipulated in the AP&S) component were missing, a management agreement with the proposed property management company was also missing.
I set all of this out on paper (not to brag you must too! – the reason for publishing this blog is to teach consumers what you need to know if you are investing in Condoland).
The Builder is allowed to assure consumers that the missing documents will be forthcoming and voila . . another one sold!
They’re allowed to fill their brochures with lies, innuendo, false photographs, knowing that there’s nothing and no-body out there that’s going to stop them.
This builder has proven himself quite unreliable with respect to “Integrity” and integrity is a very big thing with me, especially when we are dealing with million dollar and up homes!
I’ll be getting into all that in future blogs.
Today, I want to set out how consumers are dealt with in the “conventional system“.
I’m not saying that anyone in any Municipal Government is “guilty of anything“.
I’m saying that the “conventional system” is so drastically flawed that it “walks like a duck, quacks like a duck, waddles like a duck so I am left to say it looks like a duck“!
In this instance, if it were not for government involvement, one would conclude that it is the most sophisticated “scam” in the history, capable of displaying Bernie Madoff in history!
To me, this is simply the same as when this kid asked his sister while she was making or trying to make a meatloaf . . . “why she cut both ends off of the meatloaf“.
She was quick to tell her inquisitive brother “that’s because that’s what mom does“.
So, as young, inquisitive kids, they went to their mom and she told them “that’s because that’s what grandma always did“.
They then called grandma and she told us the same thing, “that’s what my mother did“.
Fortunately, their great grandma was still around, and when they posed the question to her, she replied . . . “because I only had a small pan“!
That’s what has polluted Condoland, and apparently the entire pre-construction housing industries.
We set up a mechanism just before I entered the business in 1980, and we’ve been “cutting the ends off the meatloaf” ever since!
Today, we have an industry where the consumer is absolutely being abused, under the guise of being protected at a number of levels of government!
Am I saying that there’s “a conspiracy” or that “our government is out to get us“?
No! Absolutely not.
Our lives and affairs are being managed by, hopefully, honest hard working people trying to do the best job they can do.
But, in my humble opinion, the are simply “cutting both ends off of the meatloaf“!
Something very drastic has to be done, but all we’ve seen in the four decades that I’ve been involved in Condoland is “window dressing” that supplies the “appearance of consumer protection” while all the while dragging them into unprecedentedly unfair contracts and life situations, as I’m seeing many of my “to-be” new neighbours enduring in this microcosm of all that is wrong in Condoland!
My issue in my letter to the Municipality yesterday, followed my having met with one of their inspectors on-site by coincidence, and having been given the proper contact name, was basically that “Closings and Occupancy are being imposed on a number of buyers in our development without an exterior perimeter fence being installed as set out in the Subdivision Agreement” and that’s just flat out wrong.
I received this email in response to my email:
Thank you for your email on this matter. The Subdivision Agreement is an agreement between the Town and the Developer. You have an agreement between yourself and your builder – this is your Purchase and Sale agreement.
The clause pertaining to the installation of a fence around the perimeter of the condominium block is a condition set out in the Subdivision Agreement that needs to be satisfied and despite its specifics on being completed prior to registration, the Town needs to act reasonably in the application of the clause. The building code is very prescriptive as to want constitutes occupancy and once the home is ready for ‘occupancy’ the owner may move in. The fence around the perimeter of the common lands is not a Building Code issue, hence it will not hold up occupancy.
The traditional building process sees the home built first and the lots are then ‘rough graded’. Once the final grading is completed (typically for the entire site) the fence installation would follow. Prior to fencing being installed it is not uncommon to have owners in their homes with outstanding matters like fencing and sodding to follow. Following the fencing installation, one would see topsoil and sod placed along with any other required landscaping (tree/shrub installation).
It is not uncommon for these elements (fencing/sodding/landscaping) to lag beyond occupancy despite the wording in the agreement.
If you’re concerned as to whether the developer will build the fence, I can advise you that the Subdivision Agreement requires the developer to post financial securities for the delivery of key features in the subdivisions (roads, sewers, etc). Fencing and sod is part of this security. These financial securities are only released once the developer has fulfilled his/her obligations.
If you seek to modify your closing date based on conditions set out in the Subdivision Agreement (as opposed to your Purchase and Sale Agreement) you should consult with your real estate lawyer as I am unaware of the conditions set out in your Purchase and Sale agreement.
I hope this helps.
Not bad for a “preliminary fluff off letter” I guess, but not an answer that carried any merit with me so I wrote him back:
Thank you for your timely reply Mr ________.
I do understand the parties to each agreement relating to this parcel of land.
I must apologize as I am just a little more than confused by your reply.
The Municipality of the Town of Oakville, entered into a contract with a developer (presumably to “protect the public“) by making sure this “for-profit” developers’ promises are kept to consumers, (hopefully along with all the “for-profit” builders’ s promises) by clearly setting out all undertakings and obligations of all parties.
After all, isn’t that what contracts are actually for?
The consumer in this instance has been assured under the Subdivision Agreement that “a fence will be built around the perimeter PRIOR to occupancy“, and now the builder is insisting that consumers take occupancy of partially completed homes, to allow the builder to collect their money as quickly as possible with NO FENCE.
In light of the existence of the Subdivision Agreement it confuses me why there is such a clause in it at all then!
It seems illogical and certainly not to the best interests of the consumer to have the Municipality consider it “reasonable” to allow the developer to not honour specific “mutual undertakings” set out in the body of a lengthy legal contract over the interests of the consumer (as a consumer I fail to see what can be deemed “reasonable” or by who’s standards your reference to “reasonable” refer).
The Municipality drew up and entered into a contract with a developer, and apparently feels it appropriate to allow certain clauses within that contract, to be interpreted by the developer as “casual indicators” of what must be done by the developer, and allowing the developer to define what is “reasonable” which, in essence nullifies the integrity of the contract itself.
I’m wondering where the consumer comes in to your interpretation of what is “reasonable” and further “what you feel to be reasonable” for the consumer relying on the integrity of this contract and any/all others relating to their million dollar plus investment.
Wouldn’t it have been more “reasonable” NOT TO SAY in the contract that the fence (and/or grading and/or grass) “must be done prior to Closing” especially when the “Occupancy Permit” is issued by the same party (you) that established and committed to the terms and conditions of the Subdivision Agreement?
In the world in which I live, and most consumers live, the integrity of any contract is found in the language of and adherence to, the words that form the contract.
With all due respect, I would ask you to inform us with specificity as to “what OTHER clauses in the lengthy Subdivision Agreement, the Municipality does NOT require the developer to honour as stipulated“.
The Buyers (consumers) in this development are being “railroaded into partially completed houses and forced to live in deplorable conditions, for no apparent reason other than so that the developer can get paid“!
Is it “reasonable” to anticipate that the buyers (“consumers“) will be receiving Tax Rebates on their property taxes for the time period that they are required to reside in a construction zone (contrary to the Subdivision Agreement)?
I have resolved my Closing issues with the builder (extended to November 11, 2016 as required under Tarion) acknowledging my tutorial to him specifically with regard to this builder’s unethical attempts to manipulate Tarion Notices.
I look forward to your timely reply.
He responded with an automatic notifier of his holidays starting today, and I wished him a happy holiday and will let you know when I hear from him when he returns.
This is doing what has always been done, and it is this intellectual stagnation that has left us with the mess that is Condoland.
It’s time something is done, and with you and as many of your friends as possible, we have the unique opportunity to really do something meaningful together.
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Municipality of the Town of Oakville