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7 Feb

Leaseholds, Part 3 , Native Lands

Mortgage Tips

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As convoluted as the False Creek Leaseholds are, their situation can be much easier to understand and assess than Leaseholds on land held by our Indigenous peoples.

I say “held” because there are some important distinctions on how those lands are treated. Other than lands subject to modern treaty agreements, most Native Lands are held “in reserve”. This means that the land is not truly under the control of the Indigenous nation settled there.

While things are changing, very slowly, in the past, treaties made land use very restrictive.

In the case where leasehold lands are “on Reserve”, the ambiguous ownership has dictated that the lease payments be held artificially low, not in line with the true land value. Attempts to redress this have resulted in lengthy court battles and hard feelings, because while the native band hold the land, they don’t technically own it or control it.

With the progress made in modern treaty negotiations, several systems of Indigenous landholding are now in place. They are:

Lands held In Reserve.(Land management guided by the Indian Act).
Self Government First Nations Land Registry
Indian Land and First Nations Land Registries
Fee Simple ( the most commonly used title holding method for the rest of Canada)

By way of an example of a leasehold that works, lets look at the Tsatsu Shores development.

In 2004, the Tsawwassen First Nation signed a new treaty and became self governing. As part of the treaty, they took Fee Simple Ownership of their lands and now on them outright. Their own laws mean that only First Nations members can own the land however, an oceanfront development now exists on a strata leasehold basis.

Because the First Nation actually owned the land, they could partner with a developer to manage the project. The result has been a new opportunity for both the band and homeowners.

Because the properties are on leased land, the acquisition cost is lower than you might think.

Just a quick note about financing, lenders prepared to consider financing properties on leased land will generally require the financing to be default insured, because of the added layer of risk. If considering the opportunity, remember that you will need to qualify under the new stress testing rules as a result.

As always, if you have any questions, need help or would like to run through some scenarios, please call or email.

For more information on the Tsawwassen First Nation, go here.



Jonathan Barlow