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Other
Owner Costs refer to costs paid to outside entities to address many
of the organizational, financial and legal requirements associated
with undertaking a real estate development project. These costs
include:
-
Project Consultant Fees. Consulting fees may or may not
be a cost to the project. Less experienced housing developers
may choose to obtain technical assistance from a consultant.
The terms and conditions of that contract are negotiable based
on the scope of services, but this line item should only include
costs associated with this project.
- Legal
and Organizational Expenses/Syndication Fees.
Some owners will incur organizational costs for each project
undertaken as a result of the corporate structures created to
own and manage assets. Syndication fees are another expense
associated with organizing corporate entities to handle ownership
and tax credit issues.
- Market
Study / Survey. These costs should also be directly related
to the project. The market study helps determine the feasibility
of the project, while the survey determines the physical boundaries
of the project site for construction and legal purposes.
- Appraisal
Fees.
In buying land or real property, developers will need an appraisal
of the property. It is important to make sure that the appraiser
to be used is acceptable to the lender. Lenders rely heavily
on the appraisal when making loans, and they usually maintain
a list of approved appraisal firms.
- Soil
Boring / Environmental Survey / Lead-Based Paint Evaluation.
If the project architect does not include the environmental survey
as part of his/her contract, it must be arranged and paid for
independently. The costs of any required lead-based paint inspection
should be entered here. The costs of lead-based paint hazard reduction,
however, should be included as part of the rehabilitation
cost.
- Tap
Fees and Impact Fees. The water and sewer authority often
requires connection or tap fees before a project can be connected
into the utility system. Some communities also charge impact
fees to help recoup some less direct costs associated with development
activities, such as environmental impacts, school system capital
costs, etc. Like building permits, these fees are readily available
from the appropriate governing agency.
- Permitting
Fees. Various government agencies responsible for enforcing
site plan review and building codes generally will require payment
of review fees and building or construction permit fees before
construction can commence.
- Real
Estate Attorney Fees / Construction Loan Legal Fees.
Legal fees will be incurred for incorporation, contract negotiations,
property acquisition, loan closings and other assorted parts
of the development process. Unless the project is highly unusual,
and will require inordinate legal attention, legal fees should
be in line with similar development projects.
- Use
the Other Owner Costs field to enter owner costs that
are not represented by the other items in this category. Enter
a label (replacing the "Other Owner Costs" text) and
an amount. If you do not need to use this field, simply leave
it blank.
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