Issue #34: Dragon Slaying Provisions

Back in March, CMHC launched its answer to the housing crisis — and somehow, we’re all still assembling furniture instead of homes.

That’s right, Canada’s big fix is a catalogue of pre-approved home designs that would make IKEA blush. Except instead of a BILLY bookcase, you’re assembling an entire neighbourhood.

CMHC dusted off the ol’ post-war housing playbook and gave us 50 “simple, standardized, and modest” home designs. Because nothing screams innovative 2025 solution quite like “Remember 1947?”

And guess what? Alberta gets a generous seven designs. Seven! Practically a buffet of sameness.

The catalogue includes laneway homes, rowhouses, townhouses, fourplexes, and sixplexes — all vaguely Scandinavian. Like someone tried to clone Oslo and dropped it into Calgary.

Do Swedes ever walk through red-brick suburbs and say, “Ah yes, reminds me of the Toronto housing crisis?”

I can already picture the tourism ads: “Visit Canada’s newest suburb — no passport to Denmark required!”

But in all seriousness, I'm actually cautiously optimistic about anything that speeds up the housing approval process. Whether it's Calgary's own housing catalogue initiative or these federal designs, anything that helps us avoid 18-month approval timelines is a step in the right direction.

Now, on to something that definitely isn’t standardized: the art (and chaos) of the Joint Venture agreement…

AI Lawyer vs. Real Lawyer

Editor's Note: The following is a cautionary fable about the pitfalls of relying solely on AI for legal documentation. While AI can be a valuable starting point, proper legal counsel is essential for any significant real estate transaction or joint venture agreement.

I personally know several development professionals who are now relying exclusively on AI for legal documentation—a trend that should raise serious concerns.

LandLogic and its representatives always recommend consulting qualified legal professionals for your specific situation.

The Scene

Sunday afternoon. The kitchen table is covered with draft agreements for our Lethbridge development. I'm hunched over my laptop with a manic gleam in my eye while Kirsten reviews printed documents with a look of growing concern.

"I've got it!" I announce, spinning my laptop around triumphantly. "I just asked Claude to draft our entire joint venture agreement. Look at this beauty – 47 pages of legal brilliance in under three minutes!"

Kirsten glances at the screen, her eyebrow arching skeptically. "And you're qualified to evaluate legal brilliance because...?"

"Because it sounds really official," I say, scrolling enthusiastically. "Look at all these 'heretofores' and 'wherewithals.' It even included a section on 'quantum entanglement disputes' which sounds very forward-thinking."

"Quantum what?" Kirsten puts down her pen.

"Entanglement disputes. You know, when partners get... quantumly entangled."

"That's not a legal term, Greg."

"Are you sure? Because Claude seemed very confident about it.

It also included a cool clause about 'dragon slaying provisions' in the event that we discover any mythical creatures on the property.

Kirsten rubs her temples. "Greg, remember what happened the last time you used AI to draft a legal document?"

I suddenly become very interested in a spot on the ceiling. "That... was different."

"Different how? Because our chargeFUZE agreement referenced 'battery fluid rights' which apparently isn't a thing?"

"To be fair, I didn't check that section very carefully."

"And now we're in a territorial dispute with an Associate Dealer because the AI confused 'exclusive distribution territory' with 'exclusive fishing territory.'"

"That was ONE paragraph..."

"Which is costing us $15,000 in legal fees to fix!" Kirsten takes a deep breath. "Greg, this is a multi-million dollar development deal. We need John."

"John charges $600 an hour!" I protest.

"And the AI is free," Kirsten concedes. "You know what else is free? Bad advice that costs you everything."

I scroll stubbornly through my AI-generated masterpiece. "But it even included cute little emojis in the section headers. Look, the capital contributions section has a money bag emoji 💰️ . That's user-friendly legal drafting!"

"Did you actually read what it says under the money bag emoji?"

I scan the paragraph and wince. "Okay, so it says our project is to be funded by 'exposure and good vibes ✌️ ' with profit distributions in 'high-fives and LinkedIn recommendations ✋.' That might need some tweaking."

"You think?"

"But the framework is solid!" I insist. "We just need to replace some of the specifics."

Kirsten reaches for her phone. "I'm calling John."

"Wait!" I try one last gambit. "What if we use the AI draft as a starting point, and then have John review it? We could save hours of billable time!"

Kirsten pauses, considering. "You mean use the AI to create a rough draft of what WE want, not what IT thinks a legal agreement should be?"

"Exactly! We feed it our term sheet and framework, let it structure the basics, then have a human lawyer make sure we don't end up pledging our firstborn to the ghost of real estate developments past."

"That... actually makes some sense," Kirsten admits reluctantly. "But the dragon slaying provisions have to go."

"Even the part about tax deductions for magical armor?"

"Especially that part."

I sigh dramatically, selecting and deleting. "Fine. But I'm keeping the emojis. John could use a little whimsy in his legal life."

"One emoji per section," Kirsten negotiates. "And nothing weird."

"Define weird."

"No eggplants, no peaches, and nothing that would make John question our sanity more than he already does."

"Deal." I start revising the document. "And for the record, I still think quantum entanglement could be a legitimate legal concern in partnership disputes."

"For the record," Kirsten counters, reaching for her phone, "I'm still calling John."

As she dials, I hear her mutter, "Maybe we should have a clause for AI hallucination liability while we're at it..."

The Real Lessons: AI + Legal Counsel = A Winning Strategy

All jokes aside, here's how to properly use AI for legal documents in development projects:

1. Use AI as a Starting Point, Not the Finish Line

✅ DO: Use AI to create initial outlines, identify key sections, and generate first drafts based on your term sheet.
❌ DON'T: Trust AI-generated legal language without expert review, especially for complex agreements.

2. Provide Specific Context to Your AI

✅ DO: Feed the AI your specific term sheet, detailed project parameters, and precedent agreements that worked well.
❌ DON'T: Ask for generic legal documents without providing your specific parameters.

3. Always Include Critical Clauses in Development JVs

Whether using AI or not, ensure your agreement includes these essential elements:

• Decision Authority Framework: Who can make what decisions at what dollar thresholds

• Capital Call Procedures: When additional money might be needed and how it's handled

• Default Remedies: What happens if a party fails to perform

• Exit Mechanisms: How partners can exit (buyout formulas, right of first refusal, etc.)

• Distribution Waterfall: The exact order of fund distribution (particularly important in Cost Stack JV models)

• Progress Milestones & Checkpoints: When to evaluate project performance and potentially pivot

4. Consider a Phased Legal Approach

For early-stage deals, consider this cost-effective approach:

1. Phase 1: Create a detailed Letter of Intent/Term Sheet with your AI assistant

2. Phase 2: Have attorney review the Term Sheet (1-2 hours of legal time)

3. Phase 3: Use AI to expand the approved Term Sheet into a full draft agreement

4. Phase 4: Have attorney review full agreement (typically 3-6 hours of legal time)

This approach often cuts legal fees by 30-50% while maintaining quality and protection.

Final Thought

A good attorney doesn't just protect you from bad deals; they help structure good ones. The right legal counsel adds value far beyond what they cost – catching opportunities you might miss and preserving relationships when projects hit inevitable bumps.

As I learned (the hard way, naturally): You're not paying lawyers for the paper; you're paying them for peace of mind and partnership preservation.

😨 AI Reverse Look Up

Privacy: Once upon a time, we were happy with a postal code reverse lookup to find a generalized location. Now, Chatgpt users have discovered that the popular AI chatbot can serve as a reverse-location search tool. In other words, you can show Chatgpt a picture, and it can pretty reliably tell you where it was taken.

I uploaded a fairly generic ski photo, and Chatgpt o3, deep research model, analyzed it for about 3 minutes and found me. I ordered it to avoid using any of its knowledge base.

[This goes on for two more paragraphs describing how it deduced the location]

Full chat link here.

The privacy implications are... concerning, to say the least. But the practical applications for development site analysis? Game-changing.

Imagine dropping in site photos from potential acquisitions and getting instant context on location, neighbourhood characteristics, and nearby amenities.

Just don't upload anything you wouldn't want the internet knowing about. Like that time in Vegas when... actually, never mind. That stays between me, Kirsten, and apparently, Chatgpt.

🤔 Other Stuff I Saw This Week

Emojis: In an unusual legal dispute over an incomplete home sale, a B.C. court has ruled that a text with the thumbs-up does not constitute a signature on a contract. 

Podcast: Welcome to The Homebuyer Hub with Mattamy Homes, where you're invited to join us on the life-shaping journey to home ownership. Whether you're a first-time buyer, buying your next home or simply fascinated by the ever-changing landscape of home ownership.

Tariffs: Remember, it is not just about steel. Higher prices will affect everything related to housing, whether cement, flooring, appliances, or tiles. Housing projects could be shelved, and the demand-supply gap could worsen. The last thing Canada needs right now is to increase homebuilding prices.

Policy: The Liberal Party has been in power for 10 years and the housing crisis has gotten worse in that time. Was there anything they could have done to stop it or slow it?

More Policy: In a recent poll, respondents cited the cost of living as the most important factor when deciding how to vote in the upcoming federal election, outpacing Canada’s relationship with the US. For respondents aged eighteen to forty-four, housing affordability was next on their list.

Affordability: The root causes of Canada's housing affordability crisis are complex. One of the main issues is a supply that has not kept up with a growing population, which has driven up costs for both buyers and renters.

👉 Facing development challenges that keep you up at night? Whether it's navigating byzantine zoning bylaws, optimizing your pro forma, or finding that perfect strategic positioning in a crowded market, I've seen it all in 30 years in the development trenches.

Here's how I can help:

• Strategy Sessions: One conversation could save you six figures in avoidable mistakes

• Deal Analysis: Get a second set of experienced eyes on your numbers before you commit

• Development Roadmapping: Clear, actionable plans that anticipate the potholes ahead

• Stakeholder Navigation: Learn how to speak the language of planners, politicians, and partners

Don't waste time reinventing the wheel. Every month you spend figuring things out on your own is another month of carrying costs eating into your returns.

Hit reply with "DEVELOPMENT 911" and we'll set up a quick call to discuss your specific challenges. No obligation, no sales pitch – just straight talk about your project and how I might be able to help.

Alternatively, reply with your biggest current development headache, and I'll send you my quick take on the perspective at no charge.

See you next Friday.

Cheers,

- Greg

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