REM 500 Final: REM500_Lecture6
12 Dec 2017
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Document Summary
Development process: contract needs to be negotiated between the developer and other parties, key contracts: landowner, architects, contractors, tenants, lenders. Stage 4 contract negotiation: contractor is negotiator. Stage 5 formal commitment: management is negotiator. Purchase agreement: price, deposit, conditions and responsibilities, due diligence rights, escape clauses. Mortgage contract: loan amount, rate/spread and rate structure, planned draw schedule, expected repayment date, clauses eg. default clause. Mezzanine loan another source of financing for developers: higher rate, lower equity requirement, repaid by permanent loan or share of profit or cash flow or ownership interest, less secure, riskier. Vested rights a developers right to proceed with development without concern about the rules changing. Negotiations with architect: raic royal architectural institute of canada / architecture canada, standard contract forms, compensation, schedule, scope of work. Rem500: lecture 6 - construction and negotiation: cost + margin (contractors preference, both. Bid contracts designs are sent to a set of contractors to get a quote for cost.
