# Re-zoning and subdividing raw land for resale



## Tycho (Sep 27, 2014)

Hello,

I'm looking at partnering with a good friend to purchase a large piece (120 acres) of land in BC with the purpose of subdividing and reselling, with each of us keeping one piece to develop for our own use. My plan is to build a primary residence for my family and a few cabins to rent out as the area is very popular with tourists. I don't have much knowledge or experience with this sort of thing, so I'm hoping some of you here could lend me some insight as to how I should approach this and any pitfalls or unexpected costs I might encounter.

This is an area that is experiencing a lot of growth, and with a new major employer coming in the next year, it is very likely this growth will only accelerate. I'm seeing near by plots of land 1/10 the size going for almost 1/2 the price so I feel the investment potential here is quite high.

I have a couple ideas on how I'd like to approach this. The first is to split the land into 3 equal pieces. The land runs along a highway and this would give each a decent amount of highway frontage. My friend and I would each keep one piece and we would sell the 3rd off. This ideally separates us from any joint ownership at this point and helps us finance the development of our individual plots. Is this a reasonable way to proceed?

Another idea I have is to build a 'T' shaped dirt road (I estimate about 600 meters total) to provide access to the middle of the property. This would allow us to split it into 5 or six pieces, giving us much more profit potential. I think if I had a ton of money to spare this would be the best option, but I worry the cost of building roads might be more than we can reasonably afford. Thoughts?

The land is being sold as one, but it is currently in two irregularly shaped pieces that make a nice rectangular shape when combined. Both are currently zoned Ru5, but I believe for us to do what we want, it would require re-zoning.

I don't want to make this a wall of text, so I'll leave it at that, but I would be more than happy to provide more details to anybody generous enough to lend me some advice in regards to re-zoning, subdividing, and joint ownership of property or anything else you think I should know!

Thank you for reading!


----------



## Mukhang pera (Feb 26, 2016)

You mention the land being "in BC". BC is kinda' big and zoning is not a provincial matter, it's a local government matter, so saying it's zoned RU5 does not tell us much. It could even be in the Agricultural land reserve. Nearby plots of land 1/10 the size going for almost 1/2 the price might be for a reason.

To subdivide, you might be _required_ to build some road and, as well, you might be _required_ to dedicate some land as green space or public access. If rezoning is required to get to where you want to go, that can be a long and expensive process. If getting the land out of the ALR is required well, good luck.

I have been involved in a few subdivisions if the Gulf Islands/Vancouver Island and gone are the days of the quick and dirty kind of subdivision. Lots of hoops to jump through. Those who go the distance and know how to stickhandle around the bureaucracy can be rewarded, so I am not saying don't do it. Just don't commit a bunch of money to a land purchase without being sure of where things will end up. Maybe your partner has been through the process a few times. That's a good way to learn the ropes. Also good to work in an area with which you are familiar and where you know something about the local government.


----------



## Tycho (Sep 27, 2014)

Mukhang, thank you very much for your reply!

The land is in the Regional District of Fraser-Fort George. I do have the information on what Ru5 means, and I have attached that to my message, perhaps it also clears up if it is in the Agricultural Reserve.








My friend is unfortunately new to all of this as well so we are learning as we go, primarily via internet research. It's sounds as though we have to take a risk on if the rezoning will be approved or not as the Regional District requires you submit an application before they comment on the feasibility of your rezoning request. There are however cabins almost directly across the highway on a smaller plot of land which I'm hopeful sets a precedent for the approval of allowing some cabins of my own, and perhaps the subdividing as well. My concern with the sub-dividing is the possible requirement of roads and the potential costs involved in that. My idea of dividing it in 3 leaves plenty of highway frontage for access, however I'm not sure if that is the only requirement. I can share a picture of the plot if that helps.


----------



## twa2w (Mar 5, 2016)

Based on 4a and 5b of your attachment, it would appear you will need to to get rezoning.
You can always make an offer subject to obtaining rezoning approval. You will have to be prepared to give the seller some consideration for this as it will take some time. Usually you would make an offer with a portion of ghe deposit non refundable if the rezoning fails.
You may want to spent an hour or so with a lawyer in the area who us familiar with this type of law. She should be able to give you some idea of success in this venture and the costs.

I wouldn't put to much into the fact smaller properties go for a high price per acre. This is common in every area. Some of this is the cost of subdivision and the risk. As well, each additional acre adds less incremental value. How much more is 11 acres vs 10 acres. Perhaps nothing.


----------



## twa2w (Mar 5, 2016)

Here is a link to see if your property is in the ALR. ( top right area of link)
http://www.alc.gov.bc.ca/alc/content/home

ALR is separate from the district zoning. If in alr you will have to apply to rezone alr as well as the ru5. Two different areas of government. 

Have fun.


----------



## Mukhang pera (Feb 26, 2016)

Not sure how much more I can say, Tycho. These things tend to be quite site-specific. What will fly in one venue won't get off the launch pad in another. So I encourage you to do your research, and perhaps not just online. A modicum of "boots on the ground" research would probably be useful. That includes going and chatting up those at the local government level, in the planning department. Ask about and read such things as the "Official Community Plan" that covers the site in question. The OCP will reflect the goals and objectives of the community. Such are usually developed with considerable public input and describe what a community would like to see in terms of land use and development. 

I would suggest you try to keep your first land subdivision/development simple and in accord with existing bylaws and local government policy. You might be biting off a bit much to be considering zoning changes, OCP amendments, complete with public hearings and council meetings for first, second and third readings of amending bylaws. All the more if you are based in Alberta when doing so.

Twa2w has made some worthwhile comment. A purchase subject to rezoning is often done. Also as Twa2w suggests, a chat with a local lawyer working in the municipal law field would be helpful. If rezoning is in sync with the thinking at city hall, it might not be too onerous an undertaking. A local lawyer working with this stuff on a regular basis should have some insight as to what can be easily accomplished and what might require much more effort (and cost).

You mentioned joint ownership of property and seeking some guidance there. Perhaps a start would be looking at the “Bought House with a Sibling” thread recently started, and the references it contains. You and your friend will have to hammer out some kind of agreement concerning a number of matters, including who pays what, both in terms of acquisition and costs along the way, division of profits or losses and how to resolve issues related to the development of the property, when it gets sold, etc. At some point your vision and that of your partner might diverge. Perhaps his pockets are deeper than yours and he'll want to press on with a vision for the property that will cost more to pursue than you are up for. What then? You should probably have an agreement with "recital clauses" setting out mutual goals and objectives, how they are intended to be achieved, who will contribute what and when, and how to resolve conflict, should it arise.

In some of these deals, conflict arises not just over money, but effort. Sometimes a partner feels that he's the one doing all the work as well as, for example, paying half of the bills. That does not always create conflict or resentment, but often it does. There should be some understanding of mutual expectations in terms of division of labour as well as division of financial responsibility at every step.


----------



## Just a Guy (Mar 27, 2012)

This is not an easy thing to do, the government hoops can be a nightmare, especially in BC where you may also need to consider land claims.

Each district has its own rules, I once o
Looked at a property that was right on the corner of three different districts, properties sold for 3.5-4 million in two of the districts, but the property on the third was listed for $900k and never sold. The third district would not approve any reasoning or building permits making the land virtually worthless. 

Even if you have a good government, the requirements can be prohibitive. I've also seen where the compliance rules change each time you go in for approval...where at first you only needed a road, it became a road and utilities, then it became a road, utilities and some form of fire suppression, then it became a paved road...each time the developers thought they'd met the requirements, the bar was raised...

Even if you get it developed, there's permitting for the cabins, insurance, proper waste disposal, things have to be build to consumer grade, not personal or farm code, fire inspections, etc. If you have outsiders come onto your property, that opens a whole new can of worms...

This is not the best way to start learning. In most cases I've seen, you're thrown in the deep end an people chuck rocks at you every time you surface. Of course, you may be in a developer friendly area and may make a lot of profit but, if it were really that easy, he bigtime developers would probably be all over it before you even began to think about this project.


----------



## Tycho (Sep 27, 2014)

Great input everybody, very helpful. Apologies for my delayed response.

I've checked the ALC map, the land is not in the ALR, so that is good news. I've also read through the OCP for the area and I'm not seeing anything discouraging there. The OCP in fact seems to be heavily promoting tourism, and development that supports it. So that is a positive sign in regards to my plan to build cabins, as it seems to gel quite well with their vision of growth. Reading the OCP has actually been very informative and I feel after reading it I'm gaining some understanding as to how communities plan and control their development.

In regards to sub-dividing I feel I still have a lot to learn as to how to approach it and what the local government would approve, but the OCP doesn't have any lines that are scaring me off. I've found a contact email for the area, and I've sent off a letter with a few questions in hopes they can give me some basic guidance.


I'm feeling positive about continuing to move forwards with this. If I'm going to stick with the water analogy I've dipped a toe in and it seems warm enough for swimming, and I don't see anybody on the shore looking to throw rocks just yet. That said I don't know whats under the surface just yet, hah. In all seriousness I know I still have much to learn. You have all been very helpful and informative, and I appreciate the words of warning and knowledge you have offered; it's very generous of you all to take the time to help me out.

I may very well be back with more questions, and would love more input in the mean time if you have it.


----------

