​​Winnipeg Impact Fees – Legal Challenge Update

November 17, 2020

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On October 27, 2020, the court order finalizing the decision in the Impact Fee court application was signed by Justice Edmonds and took immediate effect. The court order quashes the City of Winnipeg’s Impact Fee by-law and instructs the City to refund the fees collected plus interest to those who paid them. With the court order now in effect, the 30-day window for the parties to appeal the decision has begun.

The MHBA’s legal counsel has advised that the City of Winnipeg has 30 days within which it could file an appeal, but it has already indicated that it would not do so. Instead, we understand the City is making preparations to pay the refunds to the persons who took out the applicable permits. We do not yet have a final word regarding the timing of issuing the refunds.

To view the court order, click here.

Refund Process:
Our understanding is that the City of Winnipeg is working on the process of refunding the Impact Fees collected as per the court order. The order states:

“To the extent that any developers or builders paid the Impact Fee and are entitled to the refund set out in paragraph 5 above, such developers and builders are ordered and directed to refund the Impact Fee to the homeowner or purchaser or such other person to whom the Impact Fee had been passed on together with the accrued interest received from the City subject to any contractual arrangements to the contrary”.

The court order recognizes that purchase agreements/contracts may include specific arrangements regarding the refunding of the impact fee. The MHBA recommends that all builders review the court decision with their own legal counsel to determine how the court order will impact the purchase agreements/contracts they have in place with their customers.

Impact Fee on permits while collection was “suspended” by the City of Winnipeg:
The court order quashes the City’s Impact Fee by-law and it is no longer in effect. The City no longer has the authority to charge and collect the fee on building permits. However, the City of Winnipeg has the opportunity to appeal the decision until the appeal window has concluded. Should the City appeal, the by-law would likely remain in effect. Should an appeal be filed and the by-law remain in effect, the City has informed the MHBA that it can and may collect the impact fee on permits taken out during the suspension of collection.

While it appears very unlikely that an appeal will be filed by the City of Winnipeg, the MHBA continues to recommend that our members take appropriate steps in their purchase agreements to protect themselves and their customers from this potential scenario until the appeal window has concluded.

 

Consumer Inquiries:
Should you be contacted by customers regarding the status of the impact fee refund from the City of Winnipeg, the MHBA recommends that you indicate to them that this will continue to take some time to be clarified. The City of Winnipeg continues to have the opportunity to appeal the decision but our expectation is that they will not. Once the City has indicated how and when the refund process will take place, the MHBA will notify members with a further update.

Should you be contacted by customers regarding if they are entitled to receive a refund, the court order clearly states that the refund is subject to any arrangements agreed to in their purchase agreement/contract. The court order recognizes that purchase agreements may have negotiated specific arrangements regarding the potential refund of the impact fees and those arrangements remain valid with this court decision. Should no arrangement regarding the potential refunding of the impact fee be present in the purchase agreement/contract with the customer, the court order indicates that the customer is entitled to the refund. The MHBA recommends that all builders review the court decision with their own legal counsel to determine how the court order will impact the purchase agreements/contracts they have in place with their customers.

The MHBA will continue to update you on any and all new information and activities regarding this process as they are available

If you have any questions, please contact Lanny McInnes, MHBA President & CEO at lmcinnes@homebuilders.mb.ca.