Real estate developers, beware of the increase in monetary guarantees for projects affecting the heritage of the Ville-Marie borough

July 2018

Real estate developers, beware of the increase in monetary guarantees for projects affecting the heritage of the Ville-Marie borough

Aubie J. Herscovitch
This email address is being protected from spambots. You need JavaScript enabled to view it.  
514.878.3272
Justine Ménard
This email address is being protected from spambots. You need JavaScript enabled to view it.  
514.878.8674

Are you planning to restore a heritage building in the Ville-Marie borough, or to demolish it as part of a replacement project? If so, the following information is not to be taken lightly. On July 5, the Borough Council of Ville-Marie adopted, on its first reading, a project to better protect the neighborhood's heritage, which will affect developers' projects in the borough's heritage areas. The proposed changes increase the monetary guarantees imposed on developers who wish to obtain a demolition or building restoration permit.

These monetary guarantees ensure the respect of the conditions of authorization for demolition or the conservation and restoration of significant architectural elements . Currently, only the value of the building is taken into account in the calculation of the monetary guarantee. The proposed regulation will include the value of the land indicated on the assessment roll2. The Borough intends to take into account not only the value of the building for the calculation of guarantees, but also the value of the land. Since the latter is often considerably higher, the amendment would substantially increase the amount on which the guarantees required to obtain the permit are calculated.

The following are the proposed modifications3:

Type of work Actual monetary guarantees4 Proposed modifications
Restoration 5 % of the building value 10 % of the value of the building and land
Demolition 20 % of the building value 15 % of the value of the building and land

Demolition including preservation of a heritage element

25 % of the building value 25 % of the value of the building and land

Fines for violations of permit conditions are also significantly increased. For example, a fine for a natural person who does not meet the conditions of the permit increases from $ 300 to $ 1,000 and, for a company, from $ 600 to $ 2,0005.

The Borough Council of Ville-Marie states that the proposed regulation will better regulate the reorganization of existing heritage areas and will contribute to their preservation6. The Council is also of the opinion that the change will have no impact on developers and individuals who do not violate municipal regulations, since their guarantee will be returned when the project ends7.

The Urban Development Institute of Quebec (UDI), which represents the Quebec commercial real estate industry, is worried that some real estate developers will not have the necessary funds for the new guarantee8. UDI believes the changes will greatly affect the costs of a real estate project causing developers to see their borrowing capacity decrease9. UDI is also concerned that the increase of the guarantees may reduce competition in the market10.

A public consultation meeting will be held on August 22 to further discuss the proposed regulation. In the interim, it is important to evaluate your demolition or building restoration projects by referring to the regulations currently in force, in order to ensure the quality and respect of the work to be performed in the Ville-Marie heritage areas. Stay alert to the evolution of this proposed regulation, which must first pass the second reading and, if implemented, will be adopted by September 11, 201811.

 

1Official press release of the Borough, July 5, 2018,  < http://ville.montreal.qc.ca/portal/page?_pageid=7317,80081620&_dad=portal&_schema=PORTAL&id=30380&ret=/pls/portal/url/page/arrond_vma_fr/rep_annonces/rep_communiques/coll_communiques >

2 Id.
3 Id.
4 Règlement d'urbanisme de l'arrondissement Ville-Marie, art. 712.1, Règlement sur la démolition d'immeubles (CA-24-215), art. 20 et 28.
Proposed regulation, CA-24-282.115.

6 Official press release of the Borough.

7 Id.
8 Normandin, Pierre-André, « Ville-Marie serre la vis aux promoteurs », La Presse, 6 juillet 2018.
9 Institut de développement urbain du Québec, « Nouvelle réglementation arrondissement Ville-Marie », 6 juillet 2018, < https://idu.quebec/fr/nouvelles/nouvelle-reglementation-arrondissement-ville-marie-1 >
10 Id.
11 Official press release of the Borough.

This bulletin provides general comments on recent developments in the law. It does not constitute and should not be viewed as legal advice. No legal action should be taken on the basis of the information contained herein.

 

DE GRANDPRÉ CHAIT LLP

1000, Rue De La Gauchetière Street West, Suite 2900 Montréal, Québec Canada H3B 4W5

T 514 878-4311 | F 514-878-4333 | This email address is being protected from spambots. You need JavaScript enabled to view it. | www.degrandprechait.com