As a business owner or property developer, you are no stranger to development fees. These fees are a necessary part of any non-residential development project, covering everything from building permits to impact fees.
However, there could be costs that you are not aware of. If you know how to identify these hidden costs, you may be able to save money on your next project.
Costs from inflation
Governments typically calculate development fees based on the estimated cost of the improvements or services that you have to do at the time of the project. However, if your project takes several years to complete, the actual cost may be much higher due to inflation.
Costs from delays
Development projects can be subject to a variety of delays, including regulatory delays, construction delays and financing delays. In some cases, these delays can result in additional fees or penalties that can add to the overall cost of your project.
Costs from overcharging
While most local governments are fair in their assessment of development fees, there have been cases where they have overcharged developers. If you feel that the government has overcharged you, you can challenge the fees through the Director of the Division of Taxation. The fees will go into an interest-bearing escrow account, and you can claim the money with interest if your challenge is successful.
You have to stay informed and up-to-date on the latest regulations and fee structures in your local area. By working closely with local governments and other stakeholders, you can minimize the impact of these fees and ensure the profitability of your projects.