Land Assembly

BC Land assembly refers to combining adjacent parcels of land to form a single, larger site, which is then sold as a package to a developer.  Land assembly in BC can be immensely profitable since cities will generally permit much higher density development on larger sites than on smaller.  Moreover, the increasing scarcity of land in urban areas means that land assembly is often the only way to come up with suitable development sites for:

• residential subdivisions
• high rises
• retail complexes
• schools
• hospitals
• airports
• government use

Homeowners can achieve significantly higher value for their properties if they are part of a land assembly in BC.  However, the process can also cause a lot of stress, uncertainty and disappointment without the right guidance and expectations.   Team Dana and Amar use our considerable experience to ensure homeowners fully understand all of the unique aspects of participating in land assemblies upfront.

So what are the main homeowner considerations when deciding if a land assembly is right for them?

• Longer Time Horizon.  The time to assemble and list multiple properties, find a developer, and allow them time to do due diligence and complete will take much longer than a traditional home sale – it can take as long as two years or more!   The contracts you sign will clearly state the key dates and it’s really important to take the time to understand what those mean to you, and that you are willing to wait.   Contracts are difficult to undo once signed, so do take the time!
• Market Risk.  Housing prices in Greater Vancouver are volatile, and can go up (or down) significantly after you sign a contract with the developer.   The longer time horizon means that home prices can change significantly before your sale completes, possibly making it difficult to buy your next home.
• Financial and Legal Advice.  It’s difficult to stress this strongly enough.   Because of the long time horizons and the complexity of developer contracts, it’s really, really important to seek professional financial and legal advice to help you understand the risks and benefits of being involved in a land assembly in Greater Vancouver.
• Shared Commitment.   A land assembly involves, by definition, multiple homeowners.   You are all partners in the ultimate success or failure of this venture!   All must be fully and equally committed in order for a successful conclusion to be reached.   If one homeowner reneges on the their agreement, there will be consequences for all homeowners.

‘All for one and one for all’ is integral to the success of a land assembly project. In the world of real estate, teamwork and unity among property owners are paramount. When neighbors share a common vision, it eliminates uncertainty for both property owners and developers, resulting in a smoother and more efficient transaction process. A commonality of vision and purpose also gives the owners more power in negotiating prices with the developer!

However, what happens when everyone acknowledges the need for land assembly but holds differing opinions on the next steps? Or one owner thinks they can get more money than their neighbour? This will stop the land assembly process and everyone is losing an opportunity.

It is important for all parties involved to understand the Land Assembly: benefits to the homeowner, the (usually) long timelines, the process and the land value. Whatever information you have, share your knowledge with the other parties involved!

Everyone needs to understand that what may seem like a promising opportunity for them can sometimes instill fear or doubt in their neighbours. Moving is not easy for everyone! Try to empathize with your land assembly ‘friends’, give them examples of areas where they can move, share your experience. Pay attention to your neighbours’ concerns and offer constructive solutions.

Land assembly differs significantly from the residential property market. The timelines are often longer, and the process can be more difficult but the financial gain can be much bigger. Remember Land assembly requires the cooperation of all parties involved, making teamwork an indispensable component of the process. Maintaining healthier relationship with your neighbours will increase the chance of a successful deal.

Here are our key tips for successful land assembly in BC:

• Accurate Pricing.  Many homeowners believe that developers have unlimited cash to spend on purchasing land.   Nothing could be farther from the truth!  Developers are keenly analytical businesspeople:   they will build a business case for each development, taking into account their expected profits, risks and contingencies.   Team Dana and Amar have the experience necessary to replicate this business case, so you can confidently price the property at a level that will sell, without leaving money on the table!
• It’s a Business Transaction.  The majority of homeowners buy and sell homes on emotion.   Set these aside!  The developer doesn’t care about the condition of your home, your special upgrades, or family sentiment.   They are solely interested in the land, and how much they can build and what their profits will be.   If you are to succeed, you must adopt the same mindset!
• Collaboration and Fairness.   The most common reason for land assembly failure is that one homeowner feels entitled to more money than their neighbours.    A homeowner may feel that as a corner lot, his property is worth more; or that his home is newer or larger, and should receive a large portion of the proceeds.   However, to the developer, the home is irrelevant – they are paying for the total square footage of the building lot.   We run a very transparent process, ensuring fairness for all and helping homeowners foster a sense of fairness through the whole process.

The purchase of a land assembly carries all the same risks associated with any land purchase, plus the additional challenges of dealing with multiple owners.   Some of the issues that can arise include:

• errors in the legal descriptions
• gaps between the lots being assembled
• encroachments from lots not being purchased
• old easements or rights of way
• old undischarged mortgages or leases
• orphaned laneways

Developers and lenders alike would be well served to invest in insuring the assembled property’s title. On top of the extensive protection a title insurance policy offers, it offers some surprising benefits that can make the land assembly purchase much easier.

Home Builders should be familiar with BC Housing requirements & Canadian Home Builders’ Association.

Before you consider buying a home learn more by checking the facts & tips on our Real Estate Blog page and see how the process works on our Buying a Home page.

Our BC Properties for Sale pages are a great way to get to know different communities. Begin with the photo presentations highlighting each community. Then review detailed information and real estate Market statistics specific to that community.

Each community page also allows you to quickly access the BC Listings in that area, broken out by property type (houses for sale, duplex for sale, townhouses for sale, condos for sale and land for sale).