Category Archives: Native Land

WFN – ARIA LEASE FAQ

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Aria is a development of multifamily condominium apartments which are located between the 8th and the 9th hole of the Two Eagles golf course in Westbank, BC (Development Website). Homeowners are issued a share in the Lessee Corp. and granted a leasehold interest.

  1. What is the term?  Unless earlier terminated, the sublease expires: April 24, 2105. Upon termination of the lease, your leasehold interest will expire and you must remove all belongings and leave the premises in good condition. A lease may be terminated prior to the end of term in the event of an uncured default of either the sublease or the head-lease.
  2. Is the lease entirely prepaid?  PARTIALLY- There is 1) the initial capital cost (the purchase price) is payable plus 2) ongoing monthly rent (which was initially $140/mo) plus 3) ongoing common costs (similar to strata fees).
  3. Other financial obligations under the lease? Although the rent is pre-paid however, there are additional components which you are responsible for paying on a monthly ongoing basis being such items as: Property Taxes, Charges and Utilities are payable to the WFN and Home Owners Association dues.
  4. Does the lease allow the owner to assign (sell) to a third party? YES – but, prior to assignment (sale) to any third party a certificate of good standing will have to be obtained and a transfer fee is payable by the Seller (equal to 0.4% of the sale price). The owner, prior to any assignment, will also have to pay all arrears owing to the landlord or home owners association. The Assignment must be registered with WFN.
  5. Does the lease permit the owner to obtain a mortgage from a bank? The lease will permit the mortgaging of the Tenant’s interest without consent of the Landlord. The lease also contains those specific provisions which are required by the CMHC to provide insurance to lenders.
  6. Does the lease restrict the use of the property?  YES – Your use of your property is restricted to residential uses (including home office use). Illegal activities or activities creating a nuisance are prohibited. The development contains an express prohibition of “noise which would create a disruption to” your neighbours. As the property is located on a golf course, the lease expressly excludes liability of the band or landlord or the golf course operator from damage caused by errant golf balls.
  7. Are there unique insurance requirements? YES – the Tenant must obtain a Comprehensive General Liability Insurance policy in the amount of $2,000,000 and maintain an All Risks policy.
  8. Are there provisions for a homeowners association?  Operating similar to a Strata, The Home Owners Association or Sub-landlord may levy fees and create bylaws and rules and fines may be imposed if you fail to pay your homeowner association fees or breach those bylaws or rules. The Bylaws are incorporated by reference into the lease and should be reviewed prior to subject removal.

(this commentary is based on the Sublease #SG03297 and Lease SG00715 (as amended) on January 7, 2012 and is provided as information only and is not legal advice for any specific transaction, Buyers should obtain legal advice from a kelowna lawyer at the time of the offer to sublease (purchase))

WFN – SAGE CREEK LEASE FAQ

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Sage Creek is a development of modular homes which is located adjacent to the Two Eagles golf course in Westbank, BC (Development Website). Homeowners are issued a share in the Lessee Corp. and granted a leasehold interest.

  1. What is the term?  Unless earlier terminated, the sublease expires: April 24, 2105. Upon termination of the lease, your leasehold interest will expire and you must remove all belongings and leave the premises in good condition. A lease may be terminated prior to the end of term in the event of an uncured default of either the sublease or the head-lease.
  2. Is the lease entirely prepaid?  PARTIALLY- Much like the purchase of a modular home in a park, there is 1) the initial capital cost (the purchase price) plus 2) monthly rent (similar to pad rent, which was initial $350/mo) plus 3) common costs (similar to strata fees). Increases the monthly rent are adjusted in the same manner as pad rent adjustments in manufactured home parks.
  3. Other financial obligations under the lease? There are additional components which you are responsible for paying on a monthly ongoing basis being such items as: Property Taxes, Charges and Utilities and other service fees payable to the WFN and Home Owners Association.
  4. Does the lease allow the owner to assign (sell) to a third party? YES – but, prior to assignment (sale) to any third party a certificate of good standing will have to be obtained and a transfer fee may be payable ($500). The Basic Rent (pad rent) will be adjusted on assignment to be equal to the highest Basic Rent (pad rent) payable in the development. The Assignment must be registered with WFN. If the owner is a holding corporation a change of control (share sale) of this holding corporation is deemed to be an assignment.
  5. Does the lease permit the owner to obtain a mortgage from a bank? Yes – on the condition that the mortgage is registered in the WFN Registry, the lease will permit the mortgaging of the Tenant’s interest.
  6. Does the lease restrict the use of the property?  YES – Your use of your property is restricted to residential uses (including home office use). Illegal activities or activities creating a nuisance are prohibited. The development is marketed toward a retirement lifestyle and therefore contains an express prohibition of “noise which would create a disruption to” your neighbours.  Exterior Alterations (additions) which would reduce the spacing distance between neighbouring buildings are expressly prohibited (without consent, which is unlikely to be obtained).
  7. Are there unique insurance requirements? YES – the Tenant must obtain a Comprehensive General Liability Insurance policy in the amount of $2,000,000 and maintain an All Risks policy.
  8. Are there provisions for a homeowners association? Operating similar to a Strata, The Home Owners Association or Sub-landlord may levy fees and create bylaws and rules and fines may be imposed if you fail to pay your homeowner association fees or breach those bylaws or rules. The Bylaws are incorporated by reference into the lease and should be reviewed prior to subject removal.

(this commentary is based on the Sublease #501528 and Lease SG0888 on January 7, 2012 and is provided as information only and is not legal advice for any specific transaction, Buyers should obtain legal advice from a kelowna lawyer at the time of the offer to sublease (purchase))

WFN – COPPER SKY LEASE FAQ

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Copper Sky is multi-family development over looking Lake Okanagan and located on Old Okanagan Highway (Developers Website).

  1. What is the term?  Unless earlier terminated, the sublease expires: July 29, 2106. At the end of the term, your leasehold interest will expire and you must remove all belongings and leave the premises in good condition.
  2. Is the lease entirely prepaid?  YES – The rent is pre-paid however, there are additional components which you are responsible for paying on a monthly ongoing basis being: Additional Rent and Home Owners Association dues, which will include common costs for property taxes, utilities, common area maintenance, common area insurance, and common area utilities.
  3. Other financial obligations under the lease? Although the rent is pre-paid however, there are additional components which you are responsible for paying on a monthly ongoing basis being such items as: Property Taxes, Charges and Utilities are payable to the WFN and Home Owners Association dues are payable (similar to strata fees, and include a 15% administration fee) which will include common costs for property taxes, utilities, common area maintenance, common area insurance, and common area utilities.
  4. Does the lease allow the owner to assign (sell) to a third party? YES – but, prior to assignment (sale) to any third party a certificate of good standing will have to be obtained and a transfer fee may be payable. The Assignment must be registered with WFN. If the owner is a holding corporation a change of control (share sale) of this holding corporation is deemed to be an assignment.
  5. Does the lease permit the owner to obtain a mortgage from a bank? Yes – on the condition that the mortgage is registered in the WFN Registry, the lease will permit the mortgaging of the Tenant’s interest without consent of the Landlord. The lease also contains those provisions which are required by the CMHC to provide insurance to lenders and will provide the lender with an opportunity to cure a Tenant’s lease default.
  6. Does the lease restrict the use of the property?  YES – Your use of your property is restricted to residential uses and home office used which are ancillary to your residential use.
  7. Are there unique insurance requirements? YES – the Tenant must obtain a Personal Liability Insurance policy in the amount of $2,000,000 which names both the Home Owners Association and Sub-landlord as additional insured and maintain an All Risks policy.
  8. Are there provisions for a homeowners association? Operating similar to a Strata, The Home Owners Association or Sub-landlord may levy fees and create bylaws and rules and fines may be imposed if you fail to pay your homeowner association fees or breach those bylaws or rules. The Bylaws are incorporated by reference into the lease.

WFN – SONOMA PINES LEASE FAQ

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Sonoma Pines is a community located next to Two Eagles Golf Course on Carrington Road. 

  1. What is the term?  Unless earlier terminated, the sublease expires: April 30, 2102. At the end of the term, your leasehold interest will expire and you must leave the premises in good condition.  
  2. What type of Lease is it? Sonoma Pines uses a “Lessee Corp” model where the Owner is issued a share in the both the Homeowners Association and a share in the Lessee Corp..
  3. Is the lease entirely prepaid?  YES – However, the Developer has pre-paid the rent for only that portion of the Development which has been completed. In addition, there are additional components which you are responsible for paying on a monthly ongoing basis being: Additional Rent and Home Owners Association dues, which will include common costs for property taxes, utilities, common area maintenance, common area insurance, and common area utilities.
  4. Other financial obligations under the lease? The rent is pre-paid however, there are additional components which you are responsible for paying on a monthly ongoing basis being such items as: Property Taxes and Utilities are payable to the WFN and Home Owners Association dues are payable (similar to strata fees, and include a 15% administration fee) which will include common costs for property taxes, utilities, common area maintenance, common area insurance, and common area utilities
  5. Does the lease allow the owner to assign (sell) to a third party? YES – but, prior to assignment (sale) to any third party a certificate of good standing will have to be obtained and a transfer fee will be payable. The Assignment must be registered with WFN.
  6. Does the lease permit the owner to obtain a mortgage from a bank? Yes – the lease will permit the mortgaging of the Tenant’s interest without consent of the Landlord. The lease also contains those provisions which are required by the CMHC to provide insurance to lenders.
  7. Does the lease restrict the use of the property?  YES – Your use of your property is restricted to residential uses only.
  8. Are there unique insurance requirements? YES – You are required to insure your premises according to the terms of the Sublease (including adding the Head Landlord, Lessee and Home Owner Association as additional insured)
  9. Are there provisions for a homeowners association? Similar to a Strata, The Home Owners Association or Sub-landlord may create bylaws and rules and fines may be imposed if you breach those bylaws or rules

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WFN – TUSCANY VILLAS LEASE FAQ

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Located at 2070 Boucherie Rd, Westbank, BC

  1. What is the term?  Unless earlier terminated, the sublease expires: January 31, 2106. At the end of the term, your leasehold interest will expire and you must leave the premises in good condition.
  2. Is the lease entirely prepaid?  YES – The rent is pre-paid however, there are additional components which you are responsible for paying on a monthly ongoing basis being: Additional Rent and Home Owners Association dues, which will include common costs for property taxes, utilities, common area maintenance, common area insurance, and common area utilities.
  3. Other financial obligations under the lease? Although the rent is pre-paid however, there are additional components which you are responsible for paying on a monthly ongoing basis being such items as: Property Taxes and Utilities are payable to the WFN and Home Owners Association dues are payable (similar to strata fees, and include a 15% administration fee) which will include common costs for property taxes, utilities, common area maintenance, common area insurance, and common area utilities.
  4. Does the lease allow the owner to assign (sell) to a third party? YES – but, prior to assignment (sale) to any third party a certificate of good standing will have to be obtained and a transfer fee may be payable. The Assignment must be registered with WFN.
  5. Does the lease permit the owner to obtain a mortgage from a bank? Yes – the lease will permit the mortgaging of the Tenant’s interest without consent of the Landlord. The lease also contains those provisions which are required by the CMHC to provide insurance to lenders.
  6. Does the lease restrict the use of the property?  YES – Your use of your property is restricted to residential uses and home office used which are ancillary to your residential use.
  7. Are there unique insurance requirements? YES – the Tenant must obtain a Personal Liability Insurance policy in the amount of $2,000,000 which names both the Home Owners Association and Sub-landlord as additional insured and maintain an All Risks policy.
  8. Are there provisions for a homeowners association? Similar to a Strata, The Home Owners Association or Sub-landlord may create bylaws and rules and fines may be imposed if you breach those bylaws or rules

Native Land: Trust Completion Dates

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In the province of British Columbia, leased lands on native reserve are now sold by a new RECBC contract which contemplate both a Trust Completion Date and a Final Completion Date.

The Trust Completion Date is the date where the Buyer deposits the Purchase Money with his or her lawyer. The Final Completion Date is the date following actual registration in the Indian Lands Registry.

Buyers should note that these days can often be as much as 90 days apart, and therefore it is important that appropriate escrow provisions be in place to ensure:
a) that the Buyer has occupancy of the home when desired;
b) that transfer and mortgage documents are appropriately registered; and,
c) the Seller is able to i) payout prior mortgages, and ii) receive the balance of the purchase price within a reasonable period of time. Title insurance may be helpful in this situation to provide “gap” coverage.

IMPORTANT: these consideration do not apply to Westbank First Nations Lands, for these property please consult the WFN Contract prepared by Peter Borszcz and Barry Porrelli.

Freehold vs. Leasehold

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At common law, in British Columbia, land tenures can be generally divided into two large catagories, fee simple land and leasehold lands.

Fee simple lands (also called freehold lands) are lands where the owner owns all the property rights associated with thoses lands, except the rights which are reserved for the Crown (for example oil and gas rights). The restrictions on use on freehold land are imposed by the Province and the local municipality.

Leasehold lands are lands where the rights of the owner are limited by the another party, usually a landlord. Long term leases (49 – 99 ys) are commonly found in the Province of British Columbia when land is sold on Native Reserves as the inalienability of native lands, under the Canada Constitution, prohibits Native Reserve being “sold” to anyone except to the Crown. Additional restrictions on the use of leasehold land are found in a LEASE or HEADLEASE document which creates contractual obligations between the Landlord and Tenant.