Specific to the equity-share properties, there is a process that both the BHC and the homeowner undertake that helps determine when the BHC will defer payment of its equity share when an offer is presented for consideration. In order for the BHC to sign off on a sale, the following criteria must be met:
1. Identification of Home Sale
The Banff Housing Corporation and the Homeowner make a binding agreement regarding the “Base Market Value” of the home.
a) The Homeowner notifies the Banff Housing Corporation that he/she intends to sell.
b) The Homeowner and the Banff Housing Corporation each procure an appraisal from a list of approved appraisers at their own expense, and simultaneously provide the appraisal to the other party. All appraisals should have at least one non-Banff Housing Corporation home as a comparable.
c) The average of the two appraisals will be accepted as the “Base Market Value” valid for a period of 3 months.
d) If the appraisals differ by more than 8%, there will be a 48 hour review period while the homeowner and the Banff Housing Corporation discuss and decide whether either party wishes to obtain a 3rd appraisal. Should either party obtain a third appraisal (at their own cost, unless both parties deem it necessary in which case the costs will be shared equally) the “Base Market Value” is the average of the 3 appraisals.
e) Appraisals are kept confidential by all parties except as noted above, unless agreed to by both parties.
NOTE: The percentage difference between appraisals is calculated by: (Highest-Lowest) over Highest x 100
Step 2: Setting of the “Bookends” of the pricing range
The upper limit of the “Range” is 6% above the Base Market Value or 3% above the highest appraisal, whichever is lower.
The lower limit of the “Range” is 6% below the Base Market Value or 3% below the lower appraisal, whichever is higher. This lower limit is not a price guarantee of any sort.
Step 3: Clear Outcomes
If a qualified Third Party Purchaser makes an offer for a sale value within the Range, the Banff Housing Corporation will consent to the transaction and will not refuse to defer its equity on the basis of the price.
If a qualified Third Party Purchaser makes an offer for a sale value above the Range, the Banff Housing Corporation may refuse consent to the transaction and refuse deferral of its equity on the basis of the price.
The above process applies specifically to consent based on price. However, equity deferral can also be refused based on public policy. The choice to refuse equity deferral based on public policy can only be made for previously established and published public policy reasons.