FIRST NATIONS LANDS
First Nations Lands are generally registered in the name of the Government of Canada. The Government sets aside land (“reserved”) for the use of the members of a certain band (Tsleil-Waututh North Vancouver, Tsawwassen, Tzeachten in Chilliwack).
Under the Indian Act a Band can request that part of a reserve be set aside for development. At the end of the day, the Government enters into a Head Lease with the Band, who enters into a Sublease with the Developer. It is this Sublease (for each unit) that becomes assigned to a Buyer. The Buyer becomes the owner of a leasehold interest, much like SFU or UBC.
There are a few key questions that come up when dealing with a prospective buyer of a Leasehold Interest in a First Nations development.
What is the term of the lease – the Head Leases are for 99 years. It usually takes a few years for the development to be completed so by the time the first development is completed, there is likely around 95 years remaining. However, for future developments that time will only shorten. The sublease on the suite will end one day before the Head Lease.
May I extend the Term of the Lease – not aware of any that have been extended yet and unless this occurs, the lease will end at the end of 99 years. This is the main difference between leasing and owning land. In theory, ownership of land can go on forever. With a leasehold property, at the end of the Term, whoever owns the sublease at that time will have to take their possessions and move out. Note this is no different than leasehold interests on properties such as UBC, SFU, parts of Granville Island and Champlain mall.
How much rent do I pay on the lease – in most, if not all developments on First Nations lands, the rent has been pre-paid in full for the 99 years. There’s no clause in the lease or the sublease which would ever allow the landlord to ask you to pay any more rent. (Note the issue with Musqueam band!)
Are there any things that I will have to pay for under the terms of the lease or sublease – yes, think like you were purchasing any other strata unit. The Buyer will pay monthly maintenance fees to the Homeowner Corporation, annual property taxes, any special levies (which have to be approved by majority of the sublease owners).
Who runs the Homeowner Corporation – again, think of this as a strata council. Each person who buys a sublease gets one vote in running the Homeowner Corporation. Each year the owners elect directors to watch over the business of the Homeowner Corporation.
Are there rules for living in the building – yes, these may have different titles, but think of these as the bylaws of a regular condominium. These rules can be changed, but only if at least 75% of the sublease owners agree on the proposed change.
Can I get a mortgage on the sublease – absolutely! Many lenders will lend on these properties.
Are there any limits on resale – no, you have the same right to sell as you do with the regular condominium.
Parking stalls and storage lockers work the same way as a regular condominium. These areas are controlled by the Homeowner Corporation much like a strata council.
What do we charge – unlike non leasehold properties, this is a bit of a moving goal post. The fees and disbursements are the same for all First Nations, but the Registration Fees vary.
Cash Purchase Fees approximately $1,050.00 plus taxes
Purchase/Mortgage Fees approximately $1,250.00 plus taxes
Sale $725.00, plus taxes
On some files there are share transfer fees as well. Title insurance is more expensive and most times GST applies, but often times PTT does not (although it is payable in Tsawwassen!!).
TSLEIL-WAUTUTH registration fees are $265.00, $530.00, $300.00 and $65.00 in same order as above.
Can we close as quickly as a non First Nations transaction – no, we usually need original documents, which need to go to Ottawa; each Band is a little different in terms of mechanics, but the files always take longer.
The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult a lawyer for individual advice regarding your own situation.
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