A residential property developer says the City of Terrace has been overcharging him for building permits, and he is threatening legal action to recoup those costs.
When a developer proposes a project to the City, such as building a new house, the City charges the developer a building permit fee based on the estimated value of the project. The details of how to estimate value and how much should be charged are laid out in the City’s Building Regulations Bylaw, which was established in 2004.
The bylaw states City building officials should estimate the value of projects by interpreting a list of guidelines. For example, one such guideline on the list states that the main floor of a house could have an estimated value of $80 per square foot. Another guideline states attached garages could have an estimated value of $30 per square foot.
Once the estimated value is determined, the City charges a building fee of $8 per $1,000 of estimated value, another $1 per $1,000 of estimated value for building plan review, plus other applicable charges such as sewer connection fees.
Lyle Salekin, owner of CDG Enterprises, one of the larger property developers in Terrace who has built numerous houses in recent years, told The Terrace Standard that he and City building officials disagree on how to interpret that bylaw when estimating project value.
Salekin said he believes the interpretable part of the guidelines is the bit that specifies to which part of the building a certain estimate value should apply. For example, there can be room for debate about whether a section of building is indoor space or outdoor space.
“How closed in is a carport until it becomes a garage, that’s what they’re supposed to be interpreting,” Salekin said.
But Salekin said City building officials told him they are interpreting the dollar amount that is estimated per square foot. Where the guideline says main floor space could be estimated at $80 per square foot, City officials are estimating a higher number because the cost of building has increased since the bylaw was established, according to Salekin.
“They’re interpreting $80 means $130,” he said.
Salekin hired a lawyer to send a letter to the City highlighting seven projects where Salekin believes he was overcharged for building projects, and demanding a refund for the amounts he says he overpaid, totalling $10,224.55.
The City will not comment on ongoing legal matters, a City building official told The Terrace Standard.
Salekin said he is not opposed to increasing the estimated value guideline amounts, but it should be done through a bylaw amendment handled by city council, rather that through interpretation by City building officials.
“I agree that you can raise the fees. I’m not saying that they can’t be $135 [per square foot],” he said. “I’m saying let’s give notice to everybody. Let’s change the bylaw. That’s why we have the bylaw.”