Impact fee refund hits roadblock

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This article was published 16/11/2020 (1932 days ago), so information in it may no longer be current.

Homeowners frustrated with delays in refunding the City of Winnipeg impact fee — declared invalid by a judge in July — will have to keep waiting, the city and home builders say.

Those who paid the impact fee on the construction of a new home will have to check their construction contracts to determine how much, if any, refund is owing, while builders will likely be the first to receive any of the $37 million collected by the city.

Keith Mozdzen, who paid the fee on his Devonshire Park home in 2019, said waiting for a refund from the city has made it difficult to bank on the cash being returned.

“There’s still a ton of unknowns. I know the judge said that the homebuilders should be refunding to the homeowners but we’ll see what happens. I’m still worried,” said Mozdzen.

The City of Winnipeg says it expects to begin issuing refunds after Nov. 28, when the appeal period following the judge’s decision expires. Both the city and the developers who launched the legal challenge say they don’t plan to appeal.

“It’s anticipated that refunds will be issued in late November, assuming the court’s decision is not appealed,” wrote city spokesman David Driedger, in an email.

But Mozdzen said it’s been a long wait for clear confirmation on when his money could be returned.

“I’m a bit frustrated. I feel like the more that time goes on, the less likelihood of getting it back,” he said.

David Eggerman, regional vice-president of Qualico, said the vast majority of his company’s clients who bought a house after the fee took effect will receive a refund. Eggerman said there are a few exceptions, however, for buyers who received equivalent discounts to offset the fee when they bought their homes.

“Our contracts clearly outline who’s eligible for the refund. In our case, the majority of the refunds will get paid back to the homeowners. In a few instances, a customer preferred to take a discount at the time the contract was written and that’s clearly outlined in the contract (that) they’re not eligible for a refund,” said Eggerman. “We chose to be very transparent with the customer.”

Since the city will refund the fee to the entity that took out each home’s building permit, in almost all cases that process would begin with a refund to the builder, said Lanny McInnes, president of the Manitoba Home Builders’ Association.

McInnes said Winnipeggers should refer to their purchase agreements to clarify rules that apply to their specific homes.

“In most cases, it should be very clear, in terms of what, if any, arrangements were made around the potential refund of the impact fee,” he said.

McInnes said the timing of refunds could vary by builder, depending on the number of permits affected by the levy.

Coun. Janice Lukes said she has heard plenty of concerns about the refund wait from those who paid the fee, many of whom live in her Waverley West ward.

Lukes noted processing time is required to ensure the city can accurately determine the correct amount of funds and interest to return for each permit.

“This is a very significant (legal) decision that was made and it impacts huge money and a huge number of people, so we’ve got to get it right,” said Lukes. “It’s really a logistical nightmare.”

The city introduced the impact fee in May 2017, levying it on new homes in some new neighbourhoods. As of Jan. 1, it added $5,249.96 per 1,000 square feet to the price of those homes.

The city says the fee raised about $37 million in revenue, including interest, by Sept. 30, 2020, all of which was held in a reserve.

joyanne.pursaga@freepress.mb.ca

Twitter: @joyanne_pursaga