Home Builders: 7 Tips for Fostering Good Neighbourly Relations

Post by: Craig Robson

Ontario home builders who are venturing into built up areas to develop homes or condominiums have good reason to be neighbourly.

In built up areas, it often happens that neighbours develop a keen and sometimes vocal interest in a project.  They may, with some justification, feel that they have a vested interest in the development, given that they will look at the completed project every day, be subject to some level of construction, traffic, shadows, noise, and other issues that might be caused by the project.

The range of concerns may range from the wholly reasonable to the absurd.  Even if concerns are not well founded or are based on false information, the risk to the home builder is that the neighbours mount a campaign intended to either change, delay, or block the proposed development.

A home builder’s best defence against such opposition is to consult with neighbours from the outset and respond to their concerns.  Specifically, home builders should:

  1. Provide information about the project to neighbours from early on.  Communicate how the project has been designed to integrate with the existing neighbourhood and limit the potential for land use conflicts or other adverse impacts.  Also give them as much information as possible about what is proposed for construction and the expected timeline;
  2. Consider convening one or more neighbourhood information meetings where the home builder can present the project in the best light;
  3. Consider setting up a website that is updated as new information about the project comes available. This should only be done where the home builder is prepared to keep the information current.  The website can also be a spot for soliciting neighbours’ comments about the project, either by e-mail or through a “Comments” form;
  4. Respond to any misinformation about the project which sometimes develops due to rumour or speculation.  If the project is a well-designed project with demonstrable community benefits, then there is every reason to keep the neighbours well-informed;
  5. For a mixed-use project, consider asking neighbours what commercial uses they would like to see in the neighbourhood.  This could reveal an unexpected need for commercial components that would otherwise be missed;
  6. Provide information about why the project is a good project for the neighbourhood and the wider community.  It is not enough that a project is expected to be a profitable one for the home builder.  Home builders should know and be able to summarize the key community benefits that will flow from individual projects; and
  7. Adjust the project to respond to legitimate concerns.  Municipal officials will often appreciate anything a builder can do to defuse a potentially tense neighbourhood situation.

Doing the above and providing information and a forum for feedback from neighbours may allow for a smoother and faster process despite the initial time it takes.  It also allows the home builder to get a better idea of the arguments it may face and provides time to build a response or defence to those arguments.


Converting an Apartment or Townhome to Condominium? Enjoy the Benefits, but Don’t Forget About Your Tenants

Post by: David Sunday

Many owners of Ontario rental properties are finding it advantageous to convert their properties to condominium.

The conversion of an apartment or townhome complex to condominium typically results in a significant reduction of property taxes payable.  In the City of Toronto, for example, the 2011 tax rate for multi-residential was 2.09% of assessed value, whereas the tax rate for residential was only 0.79% (figures rounded). The multi-residential rate applies to rental non-condominium buildings, whereas the residential rate applies to residential condominium units.

Even after allowing for an increase in assessed value resulting from conversion, the potential property tax reduction is usually quite significant.

A further benefit of conversion is that the owner’s long-term options can include the sale of individual units, rather than just the sale of an entire property or a sale of shares in the company that owns the property.

But an owner must also consider the rights of its existing tenants and how tenant rights may impact the net benefits of conversion to the owner.  Key considerations include that:

  • A tenancy cannot be terminated on account of a condominium conversion;
  • In many conversions, the Residential Tenancies Act will protect or heighten existing tenants’ security of tenure;
  • An exception occurs where the conversion occurs less than 2 years after the first rental of a unit in the complex;
  • Following conversion, existing tenants have the right of first refusal to match any agreement to buy their unit that the landlord is willing to enter into with a third party; and
  • If property taxes are reduced by more than 2.49%, then tenants may be entitled to rent reductions calculated in accordance with a formula under the Residential Tenancies Act.

Municipalities also have the power to impose conditions of approval on an application for conversion, which, if onerous, will also have a significant impact on the net benefits to an owner.

All of these factors should be carefully considered before a property owner decides whether to pursue conversion.