I recently came across a blog post on Honestbuilding.com that was so true, it was funny and made me laugh. 6 Absurd Things CRE Teams Say About Approvals and How to Address Them describes excuses we have all heard about why applications and the documents that go with them are delayed. These excuses are also used when you’re waiting for any documents, whether its signed contracts, draft loan documents or due diligence packages.
Let’s stick with development approvals for this post. Luckily, most of the development teams I work with are prompt and professional. We meet regularly, if not in person, by conference call or e-mail. One person, usually the land planner, keeps us on task and assures that we have what we need on time and deadlines aren’t missed. We are all accountable to each other. However, when the team is spread out around the state or the country for a project that is not local, we come across these kinds of problems from time to time. The person who is most harmed by this is the client, the developer, as deadlines are missed. When a purchase agreement is contingent upon obtaining approvals and there is an outside date to obtain the approvals, it is often difficult to obtain the extension due to someone failing to submit a document because an administrative assistant was unavailable to send the Fed Ex.
But I want to focus this post on some of the strange, sometimes outrageous requests that the municipalities place on the development team in order to obtain the approvals. We generally spend a great deal of time reviewing ordinances and code requirements before submitting an application for approval. We will have met with planning and zoning staff to get thoughts and ideas as to what is likely to be approved and what the requirements will be so that our applications will be as close to perfect as possible and that the review staff won’t be surprised when they see the application. And, when possible, we meet with elected officials to assure that there will be support at the board level when the time comes. Nevertheless, when applications are submitted, the comments, generally technical requirements, are often laughable.
For example, one application we are working on came back with comments reminding us that the Owners & Encumbrance Report (the title report submitted with the application) must include the names of the current owner and all mortgagees. I scratched my head because if the O&E didn’t do that already, then what did it do? The same report noted that our plan showed the storage/janitor’s closet but that it did not show a mop sink. We’re asked to confirm, following application review, that we aren’t seeking variances, when the application does not ask for variances.
The point here is that in reviewing development applications, most municipalities have set processes and checklists. There are boxes to check and even if it should be apparent that the boxes have been checked when the application is submitted, it is our job, as the representatives of the developer, to make sure that the staff receiving the application understands that all of the boxes have been properly checked off and all requirements satisfied. If a request seems silly, we have to grin and bear it. Fix the problem and move on to the next one!