In Canada, under the Indian Act and protected under the Constitution, title to certain reserve lands is held by the federal government of Canada for the use and benefit of band. A contract incorporating trust completion dates is used to complete these type of purchase. In some self-governing bands (such as the Westbank First Nation), the band is granted full control over management of the lands and has a separate land registry system.
Native Lands are inalienable therefore, tenure to Native lands is granted by a series of head leases and subleases and are only valid for a finite term (usually 49-99 years from the date of grant). At the end of the term of the lease, unlike fee simple lands, the use and possession of the lands would revert to the band.
It is important for Buyers on native lands to understand the terms of the Lease, summaries of many Westbank First Nations Leases can be found here:
Land administration can vary based on whether the lands are: Treaty Lands (ie; Nisga’a), Self Government (Westbank), or Indian Act administered lands. Within each of these systems lands can be “community lands” which are collectively administered by the band or “allotted lands” where a band member (often termed a locatee)is given the power to administer the lands.
As the nature of the property interest is fundamentally different for leasehold properties, Realtors need to ensure that the Contract of Purchase and Sale is appropriately drafted including:
- the contract should clearly identify that a leasehold interest is being conveyed and the lease is still in good standing.
- the sublease being assigned should be attached to the contract.
- any landlord consent provisions (including any landlord consent fee) in the contract should be identified.
- the interest in the home owner association (including any HOA transfer fee) should be identified.
At our firm, we require all Buyers of Native Lands to obtain a Home Owners Title Insurance Policy – Why is this important (Click Here)?