[Massplanners] Question - Projects that change hands

[Richard Harris]

Matthew,

Generally, I would take the position that the deposit was for the project
and not specific to the developer. However, there are caveats - such as
what does the Performance Guarantee or the Planning Board decision on the
project state?

They could have saved everyone some hassle by coming to talk to you first.
My approach on transfers was always that the original developer would
receive the deposit back upon my receipt of a new deposit from the new
developer. Since they didn't think through this matter before transferring
and you have received a deposit for the increased amount of the costs from
the new developer, I would ask the new developer as to whether they would
put up the additional $375 to cover the amount and then refund the amount
to the original developer. It is possible that the new developer will say
"no" and suggest that the deposit on hand was a consideration in their
acquisition of the project.

Thank you

Richard Harris, AICP
Planning Consultant
413-335-5012


On Mon, Dec 27, 2021 at 6:15 PM Matthew Heins via MassPlanners <
massplanners at masscptc.org> wrote:

> Dear MassPlanners,
>
>
>
> I hope you are all doing well and enjoying the holidays. I have a question
> about projects that change hands—that is, when a developer gets part of the
> way through the process and then sells the project to another developer.
> This sometimes happens directly after a project has been approved and is
> ready to begin construction, of course, but it can also happen at other
> stages of the process.
>
>
>
> The question is both broad and specific. Broadly speaking, my question is:
> how do you folks in other towns handle this situation, from a bureaucratic
> and/or legal standpoint? It seems to me that when a project changes hands,
> it can lead to various complications because the original developer is
> still listed in our records as the applicant. The developers rarely bother
> to give my office any paperwork about this, or even a formal letter—usually
> someone just tells me informally that a new developer has taken over the
> project.
>
>
>
> Now here’s the specific question, which alas is rather convoluted but I
> hope you’ll bear with me: About two years ago, the Pembroke planning board
> approved a project for a private developer/landowner to improve a small
> local road, which was a private road in bad condition, so that it would
> meet the engineering standards to be adequate for a “way.” This would make
> it permissible for some new houses to be built on certain lots along this
> road, since those lots would now possess frontage on an adequate way. There
> is an engineering review account for this project, as required by the
> planning board, which is meant to cover both the initial review process and
> the construction inspections. After the board approved the project, the
> original developer/landowner sold (or somehow transferred) the whole
> project to another person, who is now constructing the road improvements.
> So that person in effect became the new developer, and presumably on some
> level is now the applicant. I was informed of this in a very casual
> manner—the new developer walked into my office and explained things. Now,
> here’s the question. At the time the project changed hands from the
> original developer to the new developer, there was a balance of about $375
> in the engineering review account. (The new developer has since replenished
> the account, in anticipation of construction inspections, so the balance is
> now much higher.) Shortly after the project changed hands, the original
> developer asked me to return that $375 to him. What should I do? It seems
> to me that when the project changed hands, the engineering review account
> became under the control of the new developer, and so the account balance
> now rightfully belongs to that new developer. By that reasoning, I
> shouldn’t return the money to the original developer. What do you think?
> Obviously the amount of money is trivial, but it’s the principle that
> matters and I do need to decide. I may check with our town counsel
> eventually, but I’m curious to get your advice. I imagine some of you have
> confronted similar situations. What do you suggest?
>
>
>
> Thanks for your assistance! (And best wishes for 2022!)
>
>
>
> Sincerely,
>
>
>
> *Matthew Heins*
>
> Planning Board Assistant
>
> Town of Pembroke
>
> Email: mheins at townofpembrokemass.org
>
> Phone: 781-709-1433 / Fax: 781-709-1453
>
> Address: Office of the Planning Board, Pembroke Town Hall, 100 Center St.,
> Pembroke, MA 02359
>
>
>
> *This electronic message is confidential and intended for the named
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>
>
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