ExpatCanadian

Hey all,

Well, we are 2 weeks into our triumphant return to our native country. I know our situation is slightly different than many, if not most, of you as we are Canadian citizens who have returned rather than moving here as non-citizens. But, I've found this forum to be the best for info as you often view Canada slightly more realistically and perhaps less defensively than born and raised Canadians often do on other forums. After 17 years in the UK (most of our adult lives) we have feet firmly in both cultures so can appreciate slightly more objective viewpoints.

ANYWAY, this post isn't about that... it's about house hunting. We've come across a property that is really beautiful and ticks a LOT of boxes.... EXCEPT that it is on Native Leasehold land.... specifically the Stahaken leasehold in Tsawwassen. Anyone have any specific Canadian leasehold experience? It doesn't worry me too much since leasehold is so common back in the UK... but I know next to nothing about it here and what the potential implications of it are. Of course I would seek legal advice... but was also hoping someone here might have specific knowledge of that area?

withabix

How many years are left on the lease?

ExpatCanadian

74 years.... 2089.

JonboyE

It was a 99 year lease from 1989.

The obvious downside of leased land is that you will never own it and there is no guarantee that the lease will be renewed. Some people are OK with that. I would not be. I like the sense of security of owning my bit of land.

There was a lot of fuss in South Vancouver several years ago when several 99 year leases from the Musqueam band ran out. The old leases were a dollar a year. The band offered new leases at $19,000 a year. This was the fair market value as assessed by independent appraisers but it did not stop the hoo har from the owners in the wealthiest and snootiest part of the already wealth and snooty Westside.

PMM

Hi


1. Ensure that it is a prepaid lease.
2. Note that when the lease has less than 30 years to run, it is extremely difficult to get a mortgage.

ExKiwilass

your house will be a depreciating asset, somewhat like a car - i.e. value will go down as lease gets closer to the end.

We bought leasehold up @ SFU (since sold) and the prices up there have not kept pace with the rest of the north burnaby market. I personally would avoid it but it depends what you value. If you value lifestyle over investment potential, then it might make sense for you.

scrubbedexpat091

Explains the oddly low prices on MLS for some of the lease hold houses I have seen.

When a lease is up, who owns the house on it?

bats

Depending on the reserve the band council can ask you to leave at any time.

ExpatCanadian

Thanks for all your replies. Obviously we have due diligence to do. The length of the lease isn't a concern right now with around 74 years left. What my realtor is doing is pulling sales figures for the past 25 years for this area, so I can at least see what the short to medium term trend is. We wouldn't expect to be in the house forever, and certainly not the 45 years required to put us into the "30 years left" category. But... it's about the resale values in 5, 10 or 15 years when we do want to move on... downsize... whatever. That remains to be seen.

Also, with regards to being kicked off at any time... again not really sure that's a concern as my impression (subject to legal confirmation) is they would have to buy me out at fair market value... they can't just turf me. The lease is pre-paid... the only additional fee other than taxes is an approximately $104 annual fee towards maintenance of the common areas of the leasehold (fancy roundabouts etc).

withabix

If you look at the BC Assessment values for the land and the building, what does that show?

The value of the land will probably stay about level and the value of the building will decrease over time, will it not?

Assuming it one of those sub-$1million ones currently on MLS, the land is worth about 3/4 of the price and the property 1/4.

I know these value don't equate to the market value/selling price, but seeing as the land will only ever belong to the First Nation band (or the Crown, as that is the only body the First Nation is allowed to sell the land to), are you not effectively paying $1 million to rent a $250k building for 74 years?

Isn't it almost certain that the First Nation would not renew or extend the Lease in 74 years time...

MikeUK

I'd read up on the http://en.wikipedia.org/wiki/Grand_River_land_dispute
It may not even be relevant to your local Natives, but it does highlight the extreme issue that can arise form land claim issues and how innocent people can lose out when the issues created by other parties falls apart

bats

Not so sure about the fair market value part. Another point is that you would pay property tax to the band but may not have any voting rights on who is on the band council.

We looked at one reserve near
Peterborough but after talking to a native friend decided against it. Too many unknowns.

scilly

Mike .......

I think one major difference between Caledonia and the Tsawwassen development is that the latter was developed by the Tsawwassen band themselves, not enforced on them from outsiders.

This band is very pro-development ............. they are currently developing or working with a developer to build 2 massive shopping malls on their land near the Ferry Terminal. Naturally, those are both being built on agricultural land

They do already control developments on their land much more than I gather the Caledonia people did / do.


Expat ............. I would suggest also looking at traffic flows to and from Tsawwassen, and how the ferry traffic may impinge on you

I also think that Bats is correct in that you will have no voting privileges on any decisions made by the band ......... and that again may affect you if they decide to expand the development where this house is, or do aother development alongside.