Why realtor should be familiar with building terminology ...€¦ · REAL ESTATE DEVELOPMENT...

• Whyrealtorshouldbefamiliarwithbuildingterminology?

• Whichtypesofhomerenovationboostvalue?

• Home-improvementtrends

• Whendoi needabuildingpermit?

• CityofTorontozoninginformation

• Realestatedevelopmentkeyterms

REALESTATE

BUILDING

ECONOMICS

LAW

REALESTATEDEVELOPMENTKEYTERMS

• MeasuringRealEstate

• 1SquareFootisequalto0.0929SquareMeters

• SquareFeetorSquareMeters;SometimesalsoAcres(1Acre=43,560ft2)orHectares(1Hectare=10,000m2).

• Determininggrossareainsidebuilding,floorsize,andnumberoffloors;alsousedtocalculatelandacquisitioncosts.

• FloorAreaRatio(FAR)

• AllowableLotCoverage

REALESTATEDEVELOPMENTEXPENSES

5MAJOREXPENSECATEGORIESINREALESTATE

• LandAcquisitionCosts:Buyingtheactuallandandpayingforbrokerfeesandpermits.

• HardCosts:Buyingtherawmaterialsandphysicallyexcavating,demolishing,andconstructingthebuilding.

• SoftCosts:Payingarchitects,designers,lawyers,andengineerstodesignthebuilding.

• Furniture,Fixtures&Equipment(FF&E):Payingfortables,desks,chairs,computers,andsoon.

• TenantImprovements(TIs):Payingforitemsspecifictocertaintenants– forexample,ifonetenantwantsadifferentstyleofwindow,carpet,orarrangementofdesks

REALESTATEDEVELOPMENTFUNDING

• TheLoan-to-Cost(LTC)orLoan-to-Value(LTV)ratiotellsyouwhatpercentageofdebtyoucanuse.

• DeveloperEquity

• 3rdPartyInvestorEquity

• Mezzanine&SeniorDebt

THECONSTRUCTIONTIMELINE

• Granular– youthinkinmonthsratherthanquartersoryears.

• Planning/Pre-Construction:Youacquirethelandandpermitsanddesignthebuilding.

• ConstructionPhase:YoupayfortheHardCostsandconstructthebuilding,aswellasanyadditionalpropertiesthatareattachedtothebuilding,suchasparkinggarages.

• Post-Construction:Tenantsbegintomoveinandyoustartcollectingrent.

• SaleDate:Youassumethatthepropertyissoldattheendoftheperiodonceitreaches“stabilization”(nofurtherchangestorent,expenses,ortheVacancyRateasidefrominflation).YoucannotearnanacceptableIRRunlessyousellthepropertytosomeoneelseinthefuture.

LANDTERMS

• Shelllease

• Vanillashellimprovements(VSI)

• BareLand:Unimprovedland;landinitsunusednaturalstatepriortodevelopmentorconstructionofimprovementssuchasstreets,lighting,sewers,andthelike.Sameas rawland.

• BuiltOut:Thecompletionofconstructionofa shelllease buildingaccordingtothetermsagreeduponbythelandlord(lessor)andthetenant(lessee).

• Finished&Graded:Rawlandthathasbeenpreparedfortheconstructionofbuildings,includingtheinstallationofimprovementssuchassewerandelectriclines,streets,publicfacilitiesandcommonareas,andsoon.

HEALTHYHOMESRENOVATIONTAXCREDIT

• TheHealthyHomesRenovationTaxCreditisapermanent,refundablepersonalincometaxcreditforseniorsandfamilymemberswholivewiththem.

• Claimupto$10,000,Theamountofmoneyyougetbackfortheseexpensesiscalculatedas15percentoftheeligibleexpensesyouclaim.

• Examplesofworkthatqualifies:– non-slipflooring– installingahand-heldshower– doorlocksthatareeasytooperate

• Waterproofroof• functioningguttersanddownspouts• Drybasement• Goodfurnace• Solidfloors• Wallsthatareingoodrepair

andalloftheothercommon-senseitemsthatyouexpecttofindinahome.

Basic

IMPORTANT:Moneyspentontheseitemsisunlikelytobefullyrecovered,butshouldatleastresultinensuringthatthehomesellsforapricethatiscomparabletootherhomesinthearea.

WHICHTYPESOFHOMERENOVATIONBOOSTVALUE?

• Nicegreenlawn• Attractivelandscaping• Freshpaintinsideandout• Newcarpet• Newappliances• Stonecountertop

CurbAppeal

IMPORTANT:Itemsthataddcurbappealhelpthepropertytolookgoodwhenprospectivebuyersarrive.Whiletheseprojectsmaynotaddaconsiderableamountofmonetaryvalue,theywillhelptheplacesellfaster.

WHICHTYPESOFHOMERENOVATIONBOOSTVALUE?

• Attractivemainentrance• newsidingorstuccofinish• Kitchenremodeling• Bathroomremodeling• Newwindows• CustomDecks• Additionoflivingspace.

Addvalue

IMPORTANT:Mostoftheseeffortswillrecovertheircosts,somewillcomeclose.

WHICHTYPESOFHOMERENOVATIONBOOSTVALUE?

• Kitchenisland• Built-inkitchenappliances• Hardwoodfloorinkitchen• Laundryroomonmainfloor• Officeonthegroundfloor• Hometheatre• Whirlpoolbath

SEVENHOTHOME-IMPROVEMENTTRENDS

Source:TheAppraisalInstituteofCanada

Item ROI COSTKitchenupgrade 75%to

100%$700perLn.Ft.

Bathroomupgrade 75%to100%

Startingfrom$4,000

Interiorpainting 50%to100%

$4.60perSq.Ft.

Roofreplacement 50%to80% $2.75perSq.Ft.

Replacementoffurnaceorheatingsystem

50%to80% VariesStartingfrom$4,000

Expansion 50%to75% DependsonthesizeStartingfrom$110perSq.Ft.

Deck 50%to75% $5.50perSq.Ft.

Installationofhardwoodfloor 50%to75% $5.50perSq.Ft.

Constructionofagarage 50%to75% DependsonthesizeApproximate Budget:$20,000Source:TheAppraisalInstituteofCanada

PERCENTAGERECOVEREDUPONRESALE

PERCENTAGERECOVEREDUPONRESALE

Item ROI COSTFireplace(woodorgas) 50%to75% Startingfrom$3,000

Centralairconditioning 50%to75% Startingfrom$4,500

Finishedbasement 50%to75% DependsonthesizeStartingfrom$45perSq.Ft.

Woodfence 25%to50% $45perLn.Ft.

Interlocking 25%to50% $11perSq.Ft.

Landscaping 25%to50% Dependsonthesize&designApproximate Budget:$8,000

Asphaltdriveway 20%to50% $2.50perSq.Ft.

Pool 10%to40% Startingfrom$60,000

Skylights 0%to25% DependsonthesizeApproximate Budget:$4,000

Source:TheAppraisalInstituteofCanada

• ConstructaNewBuilding• Constructanadditiontoaexisting

building• Makestructuralalteration• Constructaccessorystructurelike

detachedgarages• Finishingabasementifincludes

structuralalteration• Energyandenvironmentalbuilding

improvementslikesolarpanelandsolarhotwatertank

• Constructadeckmorethan24inchaboveground

• Constructaretainingwallmorethat39inchinhight

• Constructingatentthatcoversmorethat646squarefeet

• Demolishallorportionofabuilding• Installorreconstructa chimneyor

fireplace• Installawoodburningstoveor

fireplace• Installormodifyheatingand

plumbingsystem(Varies)• Installabackwatervalve• Installbackflowpreventiondevice• Changeabuilding'suse

WHENDOINEED ABUILDINGPERMIT?

• Installasumppump• Addingorreplacinginsulation• Installationofcabinetryandmillwork• Undertakingwaterproofingrepairsto

abasement• Repairingandreplacingplumbing

fixtures• Replacingexistingroofingmaterial• Finishingabasementofahouse,if

• theworkdoesnotincludestructuralormaterialalterations;

• noadditionaldwellingunit(s)is(are)created(i.e.asecondunit);and

• theworkdoesnotincludetheinstallationofnewplumbing;

• Theinstallationofadditionalcoolingsystems,gasfireplaces,aircleaners,in-linehumidifiers,orhotwatertanks

• Replacingafurnaceorboilerinahouse• Thereplacementofwindowsordoors

providedthereisnochangeinthelocationorsize

• Re-claddingofahouseorsmallbuilding(3storeys orless)withnon-combustiblematerialotherthanbrickorstoneveneer

WHENISABUILDINGPERMITNOT REQUIRED?

ServiceDescriptionPreliminaryreviewofthesubmittedplanstoconfirmzoningcompliance

ServiceOutcomeAwrittennoticeofzoningcomplianceoranExaminer'snoticelistingzoningdeficiencies

RequiredDocumentation• Survey• SitePlan• FloorPlans• ElevationsandCross-Sections

WhatisPreliminaryProjectReview(PPR)

ServiceDescriptionPreliminaryreviewofthesubmittedplanstoconfirmzoningandapplicablelawcompliance,allowingacompleteapplicationforabuildingpermit

ServiceOutcomeAzoningcertificateoranExaminer'snoticelistingzoningandapplicablelawdeficiencies

RequiredDocumentation• Survey• SitePlan• FloorPlans• ElevationsandCross-Sections

WhatisZoningCertificate(ZZC)

ServiceDescriptionAbuildingpermitforanewdwelling,suchasadetachedhouse,semi-detachedhouseorrowhouse.

ServiceOutcomeBuildingPermit

RequiredDocumentation• Survey• LotGradingPlan• SitePlan• FloorPlans• RoofPlan• TrussDrawingsandFloorJoistPlan• ElevationsandCross-Sections• ConstructionDetailsandNotes

WhatisrequiredforNewHousesPermit?

• Mechanical(HVAC)Permit• PlumbingandDrainPermits

CityofTorontoWebsiteZoningBylaw:www.toronto.ca/zoning

ZONINGINFORMATION

HowtoaccesstheNEWZoningBylawZONINGINFORMATION

ResultPageZONINGINFORMATION

FRONT LOT LINE

FRONT LOT LINE

REAR LOT LINE

SIDE

LO

T LI

NESID

E YARD SE

TBACK

SIDE Y

ARD SETBA

CK

SIDE Y

ARD

SETB

ACK

SIDE LOT LIN

E

SIDE Y

ARD

SETB

ACK

SIDE LOT LIN

EREAR LOT LINE

FRONT YARD SETBACK

REAR YARD SETBACK

Lot Line means any boundary of a lot.

Front Yard Setback means a horizontal distance on a lot measured at a right angle from the front lot line to the nearest main wall of a principal building or structure.

Side Yard Setback means a horizontal distance on a lot measured at a right angle from the side lot lines to the nearest main wall of a principal building or structure.

Rear Yard Setback means a horizontal distance on a lot measured at a right angle from the rear lot line to the nearest main wall of a principal building or structure.

A

B

AB

C

C

C

D

D

Setback Definitions

Setbacks

© 2012 City of Toronto. All Rights Reserved

City of Toronto Draft Zoning By-law

FRONT LOT LINE

FRONT LOT LINE FRONT YARD SETBACK

X

Y

Z

(X + Y) ÷ 2 = ZZ = Front Yard Setback

In the Residential Zone category, if a lot is located:

Beside one lot in the Residential Zone category, and that abutting lot has an existing principal buildingfronting on the same street and located, in whole or in part, 15.0 metres or less from the subject lot, theminimum required front yard setback is the existing front yard setback of that principal building on theabutting lot; or

Between two abutting lots in the Residential Zone category, each with an existing principal buildingfronting on the same street and located, in whole or in part, 15.0 metres or less from the subject lot, theminimum required front yard setback is the average of the existing front yard setbacks of those principal buildings on the abutting lots.

A

B

Front Yard Setback Averaging

Setbacks

© 2012 City of Toronto. All Rights Reserved

City of Toronto Draft Zoning By-law

ESTABLISHEDGRADE

FRONT YARDSETBACK

0.01m0.01m

BUILDINGHEIGHT

BA

B

A

B

AAA

Established Grade means the average elevation of the ground measured at the two points where the projection of the required minimum front yard setback line is 0.01 metres past each side lot line.

Determining the Height of a Principal Building:Unless otherwise stated in this By-law, in the Residential Zone category the height of a principal building is measured as the distance between the elevation of the established grade and the elevation of the highest point on the building.

EG

H

H

EG

What is Established Grade?

Building Height

(A + B) ÷ 2 = EGEG = Established Grade

© 2012 City of Toronto. All Rights Reserved

City of Toronto Draft Zoning By-law

© 2012 City of Toronto. All Rights Reserved

What is Lot Coverage & Maximum Building Depth and Length?

Performance Standards City of Toronto Draft Zoning By-law

A Lot Coverage B

C

Building Depth

Building Length

FRONT YARD SETBACK

BC

A

FRONT LOT LINE

REAR LOT LINE

SIDE

LO

T LI

NE

SIDE

LO

T LI

NE SIDE LO

T LINE

SIDE LOT LIN

E

Lot Coverage means the portion of the lot that is covered by any part of any building or structure on or above the surface of the lot.

Building Depth means the horizontal distance between the front yard setback required on a lot and the portion of the principal building's rear main wall furthest from the required front yard setback, measured along a line that is perpendicular to the front yard setback line.

Building Length means the horizontal distance between the portion of the front wall of a principal building on a lot closest to the front lot line, and the portion of the rear main wall of the building closest to the rear lot line, measured along the lot centreline. If the relevant parts of these walls are not intersected by the lot centreline, the measurement is from the point on the lot centreline where a line drawn perpendicular to the lot centreline connects with the relevant part of the wall.

A

B

C

What is Floor Space Index (FSI)?

Performance Standards

© 2012 City of Toronto. All Rights Reserved

City of Toronto Draft Zoning By-law

LA Lot Area

A FSI = 1.0Covering = 100% of lot on 1 floor

B FSI = 1.0Covering = 50% of lot on 2 floors

C FSI = 1.0Covering = 25% of lot on 4 floors

Floor Space Index (FSI) means the gross floor area of all buildings on a lot divided by the lot area. FSI

© 2012 Copyright City of Toronto. All Rights Reserved

How is Gross Floor Area (GFA) Calculated?

City of Toronto Draft Zoning By-lawPerformance Standards

1 First Floor CB Garage (NOT INCLUDED IN GFA)

A Basement (NOT INCLUDED IN GFA)

2 Second Floor

Gross Floor Area means the sum of the total area of each floor level of a building, above and below grade, measured from the exterior of the main wall of each floor level. 10.5.40.40.(1) Floor Area

espite the de nition of gross floor area in this y law, for a lot in a Residential Zone category, the gross floor area of a residential building, other than an apartment building:

(A) does not include the area of the basement, unless the elevation of the established grade is higher than the average elevation of grade along the rear main wall of the residential building by 2.5 metres or more, in which case 50% of the gross floor area of the basement is included in the calculation of gross floor area for the building,

( ) does not include the area used for required par ing,

(C) does not include the area used for par ing, to a maximum of two parking spaces for a detached house on a lot with frontage greater than 12 metres.

GFA

A

B

C

7.2m

10.0m

ESTABLISHEDGRADE

BUILDINGHEIGHT

ESTABLISHEDGRADE

BUILDINGHEIGHT

A detached house in an RD zone that has a roof with a slope of less than 1.0 vertical units for every 4.0 horizontal units, for more than 50% of the total horizontal roof area; the maximum height is 7.2 metres and the building must have no more than two storeys.

A detached house in an RD zone that has a roof with a slope greater than 1.0 vertical units for every 4.0 horizontal units, for more than 50% of the total horizontal roof area; the maximum height for a principal building or structure on a lot is the numerical value shown in metres on the Height Overlay Map. If the lot is in an area with no numerical value shown on the Height Overlay Map the height is to a maximum of 10.0 metres .

A

B

A B

Less than 1:4hallow or flat roof

Maximum Height = 7.2m

1:4 or GreaterSloped roofMaximum Height = 10.0m

What is a Sloped Roof and a Flat Roof?

Building Height

© 2012 City of Toronto. All Rights Reserved

City of Toronto Draft Zoning By-law

© 2012 Copyright City of Toronto. All Rights Reserved

Determining Attic Space GFA

City of Toronto Draft Zoning By-lawPerformance Standards

1.4m 2.1m (min. 80%)ATTIC

NOT INCLUDED IN GFANOT INCLUDED IN GFA

Basement (NOT INCLUDED IN GFA)

Gross Floor Area means the sum of the total area of each floor level of a building, above and below grade, measured from the exterior of the main wall of each floor level. 10.5.40.40 (2) Floor Area

In the Residential Zone category, the gross floor area of a residential building includes floor area located within the building above the main walls, such as in an attic, if it:

(A) is accessed by means of a permanent stair case or mechanical elevating device, or

(B) has a vertical clearance of more than 1.4 metres between the ceiling joists below and the roof rafters, if at least 80% of such area has a vertical clearance of more than 2.1 metres and an area of at least 10 square metres.

Exclusion of Certain Floor Area Within an Attic10.5.40.40 (3)

In the case of a floor area which meets the conditions set out in regulation 10.5.40.40(2), if this area or a portion of this area is used for the purpose of housing or maintaining mechanical equipment for the building and does not exceed 20 square metres, the floor area or portion thereof is not included in gross floor area calculation.

GFA

FA

X

Term DefinitionCertificateofoccupancy Adocumentissuedbya

governmentdepartmentoverseeingconstructionandbuildingsafetystatingthatastructurecomplieswithlocalbuildingcodesandissafeforuseandhabitation.

TERMINOLOGY

Term DefinitionHVAC(hvac) Heating,ventilating,andair

conditioning.Acommonabbreviationusedinrealestatelistingsandclassifiedadvertisements.

TERMINOLOGY

Term DefinitionRawlandBareland

Unimprovedland;landinitsunusednaturalstatepriortodevelopmentorconstructionofimprovementssuchasstreets,lighting,sewers,andthelike.

TERMINOLOGY

Term DefinitionShell Acommercialorresidential

buildingwithafinishedexteriorfacadeandlandscapingandunfinishedinteriorunits,toallowfortenantimprovements(TI)andtheinstallationoffurniture,fixtures,andequipment(FFE).

TERMINOLOGY

Term DefinitionTenantimprovements(TI) Interiorstructuralchanges

madetoacommercialorresidentialbuildingpriortotenantoccupancy.

TERMINOLOGY

WARM-AIRDISTRIBUTIONSYSTEM

TERMINOLOGY

Drain,Waste,VentSystem

TERMINOLOGY

ElectricalSystem

TERMINOLOGY

FoundationSystemTERMINOLOGY

TERMINOLOGY

BuildingThermalEnvelope

PartsofRoofSystemTERMINOLOGY

FloorFramingComponentsTERMINOLOGY

TypicalWallSection

TERMINOLOGY

THISPRESENTATIONPROVIDEDBYREMAXHALLMARK&WALLZCORPINC.

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