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HomeMy WebLinkAboutPSD-026-01 , , if , Clw:illglOn REPORT PLANNING SERVICES DEPARTMENT Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE Date: MONDAY, OCTOBER 22, 2001 Resolution #:(C,!1f - ?/tJ -() / Report #: PSD-026-01 File #: PLN 7.8 By-law #: Subject: DISPLAY AND MARKETING INFORMATION IN NEW HOME SALES FACILITIES Recommendations: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. THAT Report PSD-026-01 be received; 2. THAT the Policy on New Home Sales Facilities in Attachment 1 be APPROVED; and 3. THAT Durham Region Homebuilders Association and Urban Development I nstitute to be forwarded a copy of this report and a copy of Council's decision. Submitted by: Davi Crome, M.C.I.P.,RP.P. Director, Planning Services ) /; 17-/,', c::. . Reviewed blC/ ~-.:..c~ Franklin Wu Chief Administrative Officer CS*L T*DC*df October 17, 2001 6D9 REPORT NO.: PSD-026-01 PAGE 2 1.0 BACKGROUND 1.1 At its meeting held on April 2, 2001, Council passed the following resolution: "WHEREAS new residents within the Municipality have approached Council on a number of occasions with concerns regarding the accuracy of the information provided by home builders within sales trailers and/or pavilions throughout the Municipality; AND WHEREAS Council wishes to ensure that full disclosure of any and all information is available to home buyers to ensure that they can make an informed decision when purchasing a new home; NOW THEREFORE BE IT RESOLVED THAT Staff be directed to investigate and report back on ways of ensuring that the information provided by the home builders within all sales trailers and/or pavilions is accurate with respect to surrounding future land uses, zoning, road and pedestrian facilities, conditions of draft approval and any other information deemed appropriate; and THAT Staff investigate the possibility of licensing all sales trailers and/or pavilions as a means of ensuring that said information is available to the public and updated annually." For the purposes of this report, new home sales facilities includes offices, trailers, pavilions and model homes. 2.0 EXISTING PRACTICES IN CLARINGTON AND IN OTHER MUNICIPALITIES 2.1 Municipality of Clarington Currently, the Municipality requires the developer/owner, through the subdivision agreement, to erect a sign that displays all roads, lots or blocks within the plan of subdivision. The plan shall illustrate the future housing types and distribution of each type, the location of parks, open space blocks, schools or commercial blocks proposed on the lands as well as all future uses for lands which abut the property as identified in the Municipality's Official Plan and/or approved draft plans in the vicinity. In addition, if there are any lots and/or blocks within the plan of subdivision that are affected by easements or other, restrictions identified in technical reports 610 REPORT NO.: PSD-026-01 PAGE 3 (Le.: noise reports) the Municipality, through the subdivision agreement, requires the developer/builder to advise all potential home buyers through the purchase and sale agreements of such restrictions and/or easements. 2.2 Other Municipalities Staff contacted 14 municipalities in Ontario to determine if they had experienced similar situations and if they had any requirements to regulate marketing or display materials in new home sales facilities. Out of the eight municipalities that indicated they had encountered similar problems, only four (4) of those municipalities had any type of requirements to advise a perspective home buyer of existing or future land uses and/or facilities. They included specific clauses in the subdivision agreements to display the correct information in the sales facilities and specific clauses in purchase and sales agreements if there were any restrictions or warnings pertaining to certain lots. The City of Vaughan has the most comprehensive approach. The City requires developers/builders to enter into a Model Sales Home Agreement, which among other things, requires the Planning Director and the Engineering Director to approve the display and marketing materials. Building permits are withheld to ensure the information and materials receive approval. Periodic site visits are conducted by Staff to ensure that information is correct and updated regularly. 3.0 PROPOSED APPROACH 3.1 There are two issues that need to be addressed in any revision to policy: . What level of involvement does the Municipality want to undertake in order to ensure that better information is provided to the home-buying consumer? . What is the best mechanism to achieve this? 3.2 Level of municipal involvement Staff identified three possible levels of involvement the Municipality could take to verify the accuracy of developer's sales information: . Respond to customer queries and complaints; 611 REPORT NO.: PSD-026-01 PAGE 4 . Require that certain information be provided at the new home sales facilities and periodically monitor for compliance; or . Approve the subdivision concept plan used for marketing purposes in new home sales facilities and periodically monitor for compliance. Until recently, staff took a reactive approach to sales information, responding to purchaser's inquiries. Although the subdivision agreement requires that a plan be prepared that illustrates all future land uses within the plan of subdivision and the immediate surrounding area, staff did not actively monitor the new home sales facilities regarding this information. Furthermore, there was no requirement for engineering details such as sidewalk locations, super mail boxes, etc., which became a problem over the past year. As a result, staff-initiated periodic review of new home sales facilities to review displays and literature for compliance to municipally-approved plans. However, in order to take a more pro-active approach and better ensure that information is correct, it would be necessary to take the additional step of approving the concept plans used for marketing new developments. This is the only way to check the information being provided to the home purchaser. If the Municipality was to take a more active role in reviewing developer's sales literature, it would be an additional step in the subdivision approval process requiring staff time and possibly delaying the builder's marketing program. It would also mean that the Municipality would have greater responsibility and liability for information provided to the home purchaser. On the other hand, by taking a pro-active approach, it could possibly reduce the time spent on after- sales problems. It is recommended that the following measures be undertaken as part of the strategy to address Council's resolution of April 2nd: . The Planning and Engineering Services Departments would approve the Land Use Plan for the plan of subdivision and surrounding lands used in the marketing material for the development; and . The approved Engineering- General Plan for the development would be required to be displayed in the new home sales facility; and 612 REPORT NO.: PSD-026-01 PAGE 5 . A poster with municipal contact information would be required to be displayed in the new home sales facility. 3.3 Possible Implementation Mechanism Staff investigated two possible mechanisms to implement the above measures: . Licensing By-law for New Home Sales Facilities . Subdivision Agreements and New Home Sales Facility Site Plan Agreements The Municipal Act gives municipalities the authority to license businesses and sets out the means by which to issue and regulate such licenses. None of the municipalities that were contacted regulated new homes sales facilities through a licensing by-law. By-law enforcement staff noted that licensing infractions would involve court and prosecution expenses and the fines levied could be minimal. It would not likely be an efficient mechanism to achieve changes to the marketing literature. Subdivision and Site Plan Agreements, on the other hand, legal binding agreements between the Municipality and the developer which could be quite powerful instruments for the Municipality to enforce the proactive approach to new home sales information. In this regard, the agreements could provide the Municipality the ability to withhold building permits or the return of securities if there were problems with marketing information. This is reviewed in more detail in Section 4 of this report. In addition to having implementing clauses in subdivision and site plan agreements, staff would have to monitor new homes sales facilities for compliance. This would require periodic site visits and the development of a check list for monitoring purposes. In the instance where there is a violation, the developer would be notified in writing to make appropriate changes immediately and that no further building permits would be issued until the corrections were made. 613 REPORT NO.: PSD-026-01 PAGE 6 4.0 NEW CLAUSES IN SUBDIVISION AND SITE PLAN AGREEMENTS 4.1 Staff have drafted new clauses for subdivision and site plan agreements which provide for the following: . Prior to the issuance of the first building permit, the Directors of Planning Services and Engineering Services would approve subdivision land use concept plan to be used for marketing purposes; . The owner will display the approved Engineering General Plan; . The owner will display the municipal contact information poster in a prominent location . That the Owner agrees and acknowledges that if at any time the required municipal approvals for marketing material is not obtained or that the required information is not displayed in the new home sales facility, the Municipality may refuse to issue further building permits; and . That the Owner agrees and acknowledges that if at any time the required municipal approvals for marketing material is not obtained or that the required information is not displayed in the new home sales facility, the Municipality may refuse to return the Occupancy Permit Deposit filed with the Municipality. 4.2 The Occupancy Permit Deposit is filed with the Municipality prior to the issuance of the first building permit. The amount of the deposit is dependent on the number of dwelling units in that particular phase of registration. The purpose of the deposit is to ensure that all dwelling units are fully serviced, have proper access and have received the necessary building and plumbing inspections. This deposit is returned when all lots within the plan have received the aforementioned approvals. Normally, the developer/owner provides the Occupancy Deposit. The subdivision agreement, however, permits the developer/owner of the plan of subdivision the option of requiring a builder to provide all or part of the occupancy deposit. By doing so, the developer does receive some level of assurance that the builder will adhere to the provisions of the Agreement. The Occupancy Permit Deposit section of the Agreement could be revised to require that no occupancy permit deposits provided by either a builder or the developer will be returned if any of the new clauses involving the display and marketing information are not in good standing throughout the construction of the 614 REPORT NO.: PSD-D26.01 PAGE 7 Plan of Subdivision. This will assist in ensuring that the display and marketing information is correct form the issuance of the first building permit to the last. 4.3 Similar clauses to the subdivision agreement would be added to site plan agreements for new home sales facilities with appropriate modification. Specifically, there would be no reference to the Occupancy Permit Deposit in the site plan agreement. 5.0 COMMENTS: 5.1 The new policy on New Homes Sales Facilities proposes three new steps: . Municipal approval of marketing material . Display of engineering drawings and municipal contact information in all sales facilities; and . Regular monitoring by municipal staff. These requirements would be enforced through existing agreement mechanisms to provide greater protection to the new home purchaser. The Municipality will be taking on additional responsibility by formally approving marketing material. This will require time to ensure that the information is correct but it will hopefully reduce time required for problem-solving issues with home purchasers after the fact. 5.2 Enforcing compliance through withholding building permits or the return of occupancy deposits provides a good incentive to the builders to provide correct information without having to reprint brochures and display maps. From the developer's perspective, several have indicated that as long as no new security is being required (e.g. performance guarantee for marketing material), they are willing to accept this new requirement. From the Municipality's perspective, it provides an immediate means to encourage compliance and avoids a long prosecution process that would be required by licensing new home sales facilities. 615 REPORT NO.: PSD-026-01 PAGE 8 5.3 One difficulty with the process is that the Planning Act allows the sale of lots subsequent to draft approval. Prior to the finalization of the subdivision agreement, the developer and the Municipality are working to finalize engineering drawings that show the location of such infrastructure as sidewalks, street furniture, street trees, lighting and fencing. In these early stages, the developer/builder may have to add a clause to the marketing material that all engineering details are still subject to Municipal review and approval. 5.4 The steps outlined in this report should assist with improving the accuracy of information provided to the home buying consumer. No doubt, there will still be some problems and there may need to be some refinement over time. A home purchase is the most significant purchasing decision most people make in their lives. It remains incumbent on all home purchasers to take responsibility for getting all the information they can about their future home and neighbourhood. A visit to the Planning Services and Engineering Services Departments has always been recommended before a home is purchased. 6.0 RECOMMENDATIONS It is respectfully recommended that the Policy contained in Attachment 1 be APPROVED. Attachments: Attachment 1 - Policy on New Homes Sales Facilities 616 REPORT NO.: PSD-026-01 PAGE 9 Interested parties to be advised of Council's decision: Mr. Kent Young Durham Region Homebuilders Association P.O. Box 26064 206 King Street East Oshawa, ON L1H 1CO Urban Development Institute Durham Region Area 1100 Eglinton Avenue East Toronto, ON M3C 1 H8 CORPORATION OF THE MUNICIPALITY OF CLARINGTON 40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L 1 C 3A6 T (905)623-3379 F (905)623-0830 617 ATTACHMENT 1 SUBSECTION: DEVELOPMENT GENERAL PSD-D012 Council SUBJECT: NEW HOMES SALES FACILITIES APPROVED BY: DATE APPROVED/ UPDATED: October 29, 2001 PURPOSE: To ensure that accurate information is provided at new home sales facilities with regard to future land uses and the design of roads and utilities/services within the road allowance. POLICY: 1. New home sales facilities shall include sales trailers, pavilions, model homes and offices used for the purpose of selling new homes within a plan of subdivision. Developer shall mean the party which has executed a subdivision/site plan agreement with the Municipality or is the development company which is the successor in title to that Agreement. Builder shall mean any party which has purchased lots from the developer for the purpose of constructing and selling homes. 2. All new home sales facilities, including model homes, require site plan approval. 3. All new home sales facilities shall display: i) a Land Use Plan of the approved plan of subdivision with information that correctly identifies the future surrounding land uses in conformity with the then current consolidation of the Clarington Official Plan and the Clarington Zoning By-law, and the engineered facilities (sidewalks, community mail boxes, park fencing, etc.) in accordance with the approved Engineering-General Plan. iI) the Engineering - General Plan as approved by the Director of Engineering Services. iii) a poster from the Municipality regarding municipal contacts for enquiries from potential home purchasers. 4. The Land Use Plan displayed shall be consistent with the Land Use Plan used in any marketing materials. 5. All future subdivision agreements and all future site plan agreements for new home sales facilities will include clauses that implement the fOllowing: a. no building permit shall be issued until such time as the Land Use Plan for display and sales brochures have been submitted to the Municipality and approved by the Director of Planning Services and the Director of Engineering Services; b. where the developer or builder is found to be displaying and/or distributing incorrect material, the Municipality will withhold future building permits or the return of any occupancy deposit until the material is corrected. 6. Municipal staff shall inspect new home sales facilities at ieast once annually to ensure that all material is correctly displayed and conforms with municipal approvals. MUNICIPALITY OF CLARINGTON PLANNING SERVICES DEPARTMENT H:\REPORTS\Oct.22\PSO-026-01.doc 618