- A Guide from Start to Finish....
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Engineering Consultants is committed to
being the leader in delivering innovative engineering services
through our employees. We continually strive for excellence in
engineering and to set standards by which our industry is measured.
have created this guide to provide an outline of how a subdivision
development progresses from its onset to final completion based on a
developer's perspective. This information sheet acts as an overview
of a residential subdivision development typically located in
Ontario. Although there are variances between municipalities, the
majority of the regulations are provincial and therefore similar
throughout the province.
people are surprised to find that the minimum time commitment for a
subdivision developer is about 5 years. Developers usually need to
budget for close to double the cost of the servicing construction, as
well as the cost of the land to bring the subdivision to the point
that building lots are saleable.
site developments not classified as subdivisions, generally face a
reduced set of requirements. Their time line as well as development
costs are also reduced. Industrial subdivisions usually contain lots
that have specific requirements depending on their use, thus reducing
the role of the industrial subdivision developer.
some point in the development approval phase, numerous studies will
typically be required in addition to the design drawings and design
notes showing what is to be constructed. Study costs are usually
picked up by the developer.
example of a study or report would be a stormwater management report.
It discusses water quality and water quantity that is produced and
where it will run off in the subdivision lands when it rains.
Typically it will compare pre-development run-off to post-development
run-off, usually concluding that a detention area or pond is required
capture rain water and to release the stormwater run-off more slowly.
a full environmental assessment complete with public meetings may be
required. When a subdivision's sewer and water main servicing will be
an extension of an existing municipal system, a Schedule A, Class
Environmental Assessment (EA) may be applicable requiring less time.
Occasionally, a pollutant investigation may also be required. These
investigations are typically referred to as a Phase 1, 2, or 3 EAs.
If a Phase 1 EA shows evidence of possible pollutants present,
further investigations are carried out in an escalating order (Phase
2 and Phase 3 EAs).
studies are sometimes required to determine how the proposed
subdivision will impact the existing traffic flow in the surrounding
area. The study may conclude that additional traffic lanes as well as
traffic signals may be required to accommodate the increased
municipalities request tree studies to inventory existing trees on
site and label which ones are to remain, be transplanted, or removed.
project recently required an Archaeological study for determination
if precious artifacts required protection.
studies are often required when a potential development is proposed
within close proximity of busy roads or railway tracks. When proposed
residential developments are close to "urban noise" such as
major roads or railways, the study will often require that warning
clauses must be stated on the registered title of the property
informing future home owners of these lots that they are subject to
periodic noise. Sound barriers such as berms, fencing, or a
combination of both are used to soften the impact of the noise.
require performance securities (financial guarantees) from the
developer prior to start of construction to ensure that the proposed
work will be completed. Securities are usually accepted in the form
of performance bonds, letters of credit, or cash ranging from 60% to
100% of the estimated cost of construction based on the items covered
within the development agreement. Most developers will arrange for
letters of credit from their financial institution. Banks often
require an equivalent amount of cash be available or on deposit in
some form of investment. As the subdivision progresses, the
municipality reduces the amount of performance securities required,
however maintenance securities are then required until the
subdivision works are accepted by the municipality (usually a one
year fixed term). This process is still important to the Developer
because it sets the timing of the eventual release of their financial
obligation contained in securities. Since the municipality releases
performance securities in a conservative fashion, timing does not
allow the developer to use the same funds to pay for the actual work
as it is completed.
municipalities may allow the developer to proceed with construction
prior to the final approval of the subdivision design provided that
securities are in place. This option carries potential risks since
the design may change midstream. Timing for the start of servicing
construction should be discussed with your consultant(s).
the design drawings contain information showing work to be completed,
these drawings typically do not contain all of the information
required to construct the job. A "tendering process" is
usually carried out to hire contractors to perform the work. Tender
documents are prepared outlining details and additional information
of the particular job such estimated quantities of material required,
method of construction, timing, etc., insurance and security
requirements. Tender calls may be "public" or open to any
contractor for bidding, or "private" meaning only selected
contractors are invited to bid on the contract. When it comes time
for contractors to bid on work for the new subdivision, performance
bonds are usually required from the construction company to guarantee
their work to the developer. These bonds are usually obtained through
the contractor's insurance company. Securities from the contractor to
the developer function similarly to securities provided by the
developer to the municipality. Since subdivisions usually require
several contractors to complete the job, security amounts are much
lower than those of the developer. Some developers have been able to
negotiate the use of securities provided by contractors to partially
cover securities required by the municipality, however this is not
common. Most municipalities recognize that securities are valid only
for certain periods of time. Tracking maturity dates on securities
that may only cover certain phases of work can be cumbersome,
therefore the municipality usually accepts securities from the
municipalities require on-site inspection from an engineering firm
during construction (generally, the developer's design engineer).
Information to be recorded including lengths and elevations of all
sewers placed in the ground is required as well as providing
direction to the contractor on construction methods. The inspection
staff plays a triple role: to protect the interests of the developer;
to protect municipal interests; to ensure that work is done
satisfactorily with little interference in the authority of the
contractor since they maintain responsibility for the work until the
end of their maintenance period.
municipalities will begin issuing building permits once the as-built
information is submitted by the inspection staff and a certain point
of construction has been reached. That point usually occurs at the
completion of gravel roads and when the base layer of asphalt has
been applied. In some cases curb may be required as well. This
milestone is very important to the developer since many lot sales
begin to occur only when building permits become obtainable. This is
when the Developer can begin to see some income from the
the subdivision has reached the house building stage, there is
reduced involvement with the design professionals. Questions usually
revolve around lot grading and elevations for the house. We recommend
that the developer collect a deposit for each lot from the
homebuilder. The deposit is held to cover damages, site clean-up, or
other costs during construction of the house on its particular lot.
Damage to transformers, light poles, etc. are costs that are
considered the responsibility of the developer until final assumption
of the subdivision has been accepted by the municipality.
stages of the development include: curbs, sidewalk, top layer of
asphalt, boulevard restoration. Driveway ramps are typically left
until the majority of the house construction has been completed. Some
of these items may be done by the homebuilders, however, continuity
across multiple lots may become a concern. Timing for these finishing
touches can play an important role when it comes to house sales.
hope this information has outlined the various stages of property
development and that it has answered some of the more "common"
questions you may have. Johnson Engineering Consultants has been
involved in a lengthy list of land development projects in Stratford
and its surrounding areas and we would be happy to provide this
expertise that we have collected over the years and apply it to your
- Typical Costs Encountered....
note that it is impossible to predict every eventuality and please
consider this brochure as a guide only and not a complete list.
prior to servicing (not entirely in order of occurrence)
fees - land purchase, agreements, easements, etc.
- legal survey prior to land purchase, topographical survey (needed
to start any design), Draft Plan of Subdivision & Draft Plan of
- studies may be required such as: servicing study, noise study,
traffic study, soils report, phasing report, stormwater management
report, construction estimates, and servicing / construction
drawings. It's a good idea to involve an engineer before you
purchase land in order to determine how difficult the land will be
to service and this may also influence the configuration of the
proposed lot layout
Plan of Subdivision Application
Application - usually required and can often run concurrently with
the Draft Plan of Subdivision Application
Variance Application - usually not required
Authority - application for construction (review of stormwater
management for quantity, quality, erosion, slope stability, wildlife
sensitivity, groundwater recharge, etc., may be waived in special
of the Environment - Certificate of Authority application (for
public use storm, sanitary, and water distribution systems)
and Administration fees - usually specified in the Development
Agreement and these securities are mostly based on the estimated
cost of construction. They can consist of a variety of financial
instruments but are most commonly cash and letters of credit.
Securities are usually a combination of deposits, performance
securities, and maintenance securities. It should be noted that a
reduction in performance securities usually only happens with an
increase in maintenance securities. The advantage of the shift is
that maintenance securities are typically for a set term and then
expire. It is important to note that securities are not returned
fast enough to release funds to pay the contractor who did the
for trees in boulevards - most municipalities require that the
Developer pay a fee to cover the cost to plant trees in the
boulevards. Usually one tree per lot plus is adequate as well as one
or two additional trees for the sides of corner lots.
- the Ontario Planning Act permits municipalities to claim up to 5%
of your land as parkland or cash-in-lieu of land (at the
Agreement - fees and securities. Usually the electrical system is
partially installed by a private contractor with some final hookups
done by the local utility company. The dividing line between what
the Developer hires a Contractor to do and what he pays the local
Hydro Company to do varies by project.
Charges - Some municipalities collect these charges at the time a
building permit application is received. Others collect them for all
lots prior to signing the Development Agreement. Occasionally, a
Developer will choose to pay a portion of the development charges in
order to partially fund public services that are needed to service
the Developer's land
land prior to development
as the development progresses
of Construction Prior to Obtaining Building Permits
- optional. The Developer can publicly tender the construction to
any Contractor that answers a public advertisement, or he/she
chooses one from a small list of Contractors, or selects just one
Contractor . Each method has its pros and cons. However, it should
be noted that approved construction drawings do not address all
aspects of the construction (such as municipally accepted
construction standards) or contract items (such as payment
schedules, warranty periods, Lien holdbacks, etc). We typically
involve at least 2 Contractors prior to building permits being
available. One Contractor is used for the underground servicing and
road base construction, and another Contractor is used for the
electrical system installation. If the Developer opts for some
asphalt and/or curb installation (discussed below), those items
would each normally be done by separate Contractors.
- often included in the Contractor's responsibilities
Supervision - it is typical that the Municipality expects the
Developer's Engineer to regularly inspect the construction as it
occurs. Full time presence on-site during construction is usually
specified in the Development Agreement
and compaction testing - often included in the Contractor's
servicing (storm sewer, sanitary sewer, water distribution system)
testing, sewer videos, and water quality testing - required to check
the construction done prior to building permits being issued. These
items are usually included in the Contractor's responsibilities
base (granular "B"
and granular "A")
asphalt - optional. Roads typically have two layers of asphalt. We
normally recommend doing a 6m wide strip of base asphalt. An exposed
gravel surface usually gets contaminated by clay and mud during
house construction and has to be removed and replaced with fresh
gravel. An asphalt surface also looks more complete to prospective
house buyers. Finally, the municipality will often expand its snow
clearing contract (and possibly garbage collection) to include
asphalted streets but not gravelled streets. However, it is very
difficult for asphalt Contractors to lay asphalt without a
continuous curb on each side to use as a guide. It is likely that
some of the asphalt will have to be removed and replaced prior to
the placement of final asphalt. A decision to have maintenance holes
and catchbasins installed to final grade or intentionally left low
and raised later should be made prior to base asphalt.
- optional. We normally recommend leaving the curb until most of the
house construction is finished and installed just prior to the
placement of top asphalt. This decreases the chance of damage to the
curb during house construction and snow plowing. It is the
Developer's responsibility to replace damaged sections prior to
Municipal assumption of the Development. Some Municipalities have
procedures influencing the timing of curb installation.
installation - all but street lights are usually installed at this
drawings - required prior to the issuance of building permits; a
second set of second set of as-recorded drawings will be required at
completion and will be discussed below.
- optional. The same notes for tendering that are listed above
apply. Separate asphalt and concrete contractors are typically used.
(if it has not been completed prior to building permits)
asphalt (if not completed prior to building permits)
asphalt - usually requires adjustment to the tops of the maintenance
holes and catchbasins
and testing of stormwater management ponds (usually after a
significant rainfall event); site visits are made to review the
pond's functionality; lab samples are obtained and sent to
laboratories for analysis; reports regarding results are sent to the
permit and sign construction - only required if a sign is proposed
- has to confirm that all survey bars are in place
drawings (2nd set showing more detailed information than
what is required for building permits)
- to process the completion of the Development Agreement
is also important to note that municipal standards may change during
construction. Even though the standard may have been different when
the design was approved, the developer will be expected to bring the
constructed works to meet the new standard
grading plans and review fees (also discuss grading deposits) - the
individual home builders typically are required by the Municipality
to have a lot grading plan prepared as part of the building permit
process. The lot plan must show the specific house they propose,
where it will fit on the lot, and the ground elevations throughout
the lot indicating where rainwater will drain. Most municipalities
require this lot grading plan to be approved by the Developer's
Engineer prior to being accepted by the Municipality. The Developer
can decide whether to cover all, none, or part of the costs to
prepare and review grading plans. Typically the Developer stays out
of these transactions and costs are paid by the home builder (or lot
Deposits - we recommend that a damage deposit be taken from lot
purchasers. The Municipality holds the Developer responsible for all
damage repairs until the end of the agreement. It is only
appropriate that the lot purchasers be held to the same
for other items. It has happened that a Municipality has required a
Developer to pay for items outside of his Development. Drainage
works, outlets for sewers, sidewalk approaches to the development,
park benches, playground equipment, or other exterior costs may be
Johnson Engineering Consultants Inc. to competently handle all of
your engineering requirements for your Development. With over 40
years of practical engineering expertise as well as a lengthy list of
development projects, let us put our team to work for you.
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