Phasing in a Market Downturn

There are two different ways subdivision developments can be phased.  The first type of phasing is the mapping and on-site development.  We refer to this as “development phasing,” or “construction phasing.”  In a larger development, an “overall” tentative map is approved, followed by multiple Final Maps covering the various development phases.

When it is time to bring the product to the market, we create “Marketing Phases,” which break down each development phase into multiple marketing, or sales phases.  The primary reason for this is to deflect exposure to HOA dues for unsold lots; the second reason is to deflect DRE-required bonding expenses.

Marketing/Sales Phasing can be a lifesaver!  Particularly in times of uncertainty in the market. If you are considering putting your project on HOLD, we urge you to reconsider.  Here’s why:

New Projects – INITIAL FILINGS:

  • The initial review period at DRE is approximately 75 days.  After that time, the review period is decreased to 30 days, depending upon what deficiencies are identified in the filing, the overall estimated timeframe to obtain the first Final / White Report can be evaluated.

Re-phasing AFTER SALES OCCUR:

If sales have closed in a phase, you cannot reduce the size of those phases, but you may be able to reduce the sizes of phases that haven’t begun to sell yet.

  • The DRE filing fee for an Amended Public Report is $600.
  • Budget review is required for re-phasing – the DRE timeframe for budget review associated with an Amendment filing is only 30 days.

If you have a Public Report and sales have closed in the phases you are wanting to adjust, it may not be possible to adjust your phasing.  CBS can work with you and your HOA Manager to make sure that all allowable deferments of assessments are being accounted for.  These deferments are often overlooked and can add up to sizeable discounts to the assessment program.

We urge you to consider letting the slowdown we are experiencing due to the COVID-19 virus be spent in DRE review.  When we come out on the other side of this slow period, the major review will be tolling, or completed. 

If you want the ability to sell homes in 6 months, start the DRE process now.  The DRE may become overwhelmed once the shelter in place orders are lifted and filings resume. Call us today for more insights into this issue.  We are here, ready to work with you to find the right phasing program and get it in place.

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