WFN – Tesoro Arca (Townhomes for Toys) FAQ

WFN-Tesoro Arca- Townhomes for Toys Lease FAQ

Tesoro Arca is a townhome community located around the corner from Two Eagles Golf Course on Cougar Road in West Kelowna.

What is the term?

Unless earlier terminated, the sublease expires September 29, 2106. 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 the term in the event of an uncured default of either the sublease or the head lease.

Is the lease entirely prepaid?

YES- however you are responsible for paying additional components on a monthly ongoing basis such as Property Taxes, Utilities, and Home Owners Association dues.

Other financial obligations under the lease?

The rent is pre-paid however, as with other strata-type properties, there are additional components which you are responsible for paying on a monthly ongoing basis such as: Property Tax and Utilities which are payable to Westbank First Nations (WFN), and Home Owner Associate dues are payable (similar to strata fees) which will include common costs for property taxes, common area maintenance, common area insurance, and common area utilities.

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.

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.

Does the lease restrict the use of the property?

YES- Your use of your property is restricted to residential use and home office use which are indoor and ancillary to your residential use.

Are there unique insurance requirements?

You are required to insure your premises and its contents according to the terms of the Sublease (including adding the Head Landlord, Lessee and Home Owner Association as additional insured).

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.

tesoroarca

OMREB AGM Presentations 2014

Thank you to Okanagan Mainline Real Estate Board (@OMREBcze) for inviting me to speak at their recent AGM, held in Kelowna on March 13, 2014.

Lecture Notes:

1. Strata Due Diligence and Strata Depreciation Reports for Realtors

2. Westbank First Nations and INAC Residential Sales Contracts

It is our pleasure to assist many local Realtors with hundreds of OMREB area transactions each year. If we can help you, please feel free to call (250-762-5434) or email.

Written by Kelowna Real Estate Lawyer Peter Borszcz

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WFN – WEST HARBOUR LEASE FAQ

West Harbour is a residential community and marina located immediately across Lake Okanagan from Kelowna, BC and developed by Troika Developments.

  1. What is the term?  Unless earlier terminated, the sublease expires June 5, 2107. 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 the term in the event of an uncured default of either the sublease of the head-lease.
  2. Is the lease entirely prepaid?  YES – 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.
  3. Other financial obligations under the lease? The rent is pre-paid however, as with other strata-type properties, 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) 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. The Assignment must be registered with WFN. Additionally, there is a non-assignable, non-transferable sublease for a boat slip which terminates upon assignment to a third party, a $500 assignment fee is payable by the Buyer.
  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-based business uses which are subordinate to your residential use and carried on indoors.
  7. Are there unique insurance requirements? Yes – the Tenant must obtain a Personal Liability Insurance policy in the name of both the Tenant and the Sublandlord (West Harbour Holdings Ltd.)  in the amount of $2,000,000 and maintain “All Risks” Property Insurance upon improvements of Subleased Premises to their full insurable value.
  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

By Kelowna Real Estate Lawyer Peter Borszcz.

West-Harbour-estates-2

WFN – ELKRIDGE LEASE FAQ

Elkridge is a mixed townhome and single family home community located on Elk Road near the Two Eagles Golf Course in Westbank, British Columbia

  1. What is the term?  Unless earlier terminated, the sublease expires: January 2, 2109. 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? Upon the sale of the last unit in the development and at the discretion of the Developer, Elkridge uses a “Lessee Corp”  as Sublandlord model where the Owner may be issued a share Homeowners Association which is the tenant of the Headlease (note this has yet to occur).
  3. Is the lease entirely prepaid?  YES – 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, as with other strata-type properties, 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  and home based businesses only.
  8. Are there unique insurance requirements? YES – You are required to insure your premises according to the terms of the Sublease.
  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

Elkridge

WFN – ARIA LEASE FAQ

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

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

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.