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Some comments about leases

In common law, title to land means “ownership” of land. Historically, one can prove he/she has title to land or ownership of land by producing documents or deeds. Nowadays, in BC, ownership of land is registered in the Land Title Office.

There are two main types of “ownership” of land: Leasehold and Freehold.

FREEHOLD

Freehold ownership is the most common type of ownership to land or real estate property in Canada. It is also what we ordinarily think of as ownership of real property. But what does freehold mean? According to the Real Estate Council of British Columbia’s (RECBC) definition, freehold means, ” … The owner of the freehold interest has full use and control of the land and the buildings on it, subject to any rights of the Crown, local land-use bylaws, and any other restrictions in place at the time of purchase”.

The two most important takeaway concepts about freehold are the idea of, full use and control and ownership for an unlimited period of time.

LEASEHOLD

A leasehold property is any type of dwelling property built on leasehold land. According to the Real Estate Council of British Columbia’s (RECBC) Leasehold definition, “… the right to use a residential property for a long, but limited, period of time. The owner of this right of use has a type of ownership called a leasehold interest.”

In the simplest term, the Leasehold title property means the owner DOES NOT have full use and control, and ownership is for a limited period of time.

The use of a leasehold property is generally spelled out in a document called the Head Lease or Ground Lease. The Lease documents set out the terms and conditions for the use of the land between the lessor (owner of the land) and lessee (user of the land).

TYPES OF LEASEHOLD There are many different types of leasehold real estate.

Leasehold Prepaid – Non-Strata This is non-strata, property, meaning the ownership of the property or land is not divided. The property sits on Leasehold land, and the use of land has been prepaid. Because the lease (use of the land) has been prepaid, the sale price is higher than the non-prepaid leasehold.

Leasehold Not Prepaid – Non-Strata This is non-strata property, meaning the ownership of the property or land has not been divided. The property sits on a Leasehold land, and the use of land has not been prepaid.

Overview of the leases at Musqueam

Many do not know that there are two residential land lease subdivisions on the Musqueam Band lands: Salish Park, and Musqueam Park.

 

Salish Park

Salish Park is officially identified as “Parcel B, Musqueam Indian Reserve No. Two (2), Group One (1), New Westminister District, Plan 14341”. There are 144 lots, including those that are on the WEST side of Salish Drive, between the townhouses (Shalimar) and the intersection where Salish Drive meets the south end of Staulo Crescent, and all the lots on four streets, Staulo Crescent, Musqueam Drive, Musqueam Close, and Yuculta Crescent.

  • These lots are leasehold prepaid, non-strata leases; they are prepaid 100 year leases that expire on December 31,  2073.
  • There are no annual lease payments on these lots, but property taxes are payable annually to the Musqueam Band based on values assessed by the B.C. Assessment Authority. These values are assessed as though the lots were fee simple (clear title), and not as leased land. Consequently, the resulting property taxes are roughly equivalent to what would be paid to the City of Vancouver if the lots were held fee simple in the City of Vancouver. For taxation purposes, the lots are assessed comparable to lots and houses of similar size in Dunbar and Southlands.
  • These taxes paid to the Band are primarily used by the Band to pay the City of Vancouver for providing all City services such as garbage, sewer and water, road maintenance, police and fire protection.
  • The Band provides, at no additional charge, a security patrol (white “Musqueam Security” truck) which regularly travels through the area 24 hours per day, and a semi-annual collection of unwanted large household items.
  • Leaseholders can vote in City of Vancouver municipal elections.

Musqueam Park

Musqueam Park is officailly identified as “Parcel A, Musqueam Indian Reserve No. Two (2), Group One (1), New Westminister District, Plan 14341.” There are 75 lots in the Musqueam Park development, including the lots on Kullahun Drive at the entrance to the Shaughnessy Golf club, the properties along Salish Drive, between Kullahun Drive, where it runs parallel to Marine Drive, and where it turns south at the townhouses (Shalimar), and including the cul-de-sacs off Salish Drive: Sennock Crescent, Semana Crescent, Tamath Crescent, Tytahun Crescent, and Halss Crescent. These properties were developed and sold a few years before Salish Park, and are leasehold, not-prepaid, non-strata leases. That is, those lot owners have to pay annual rents to the Band for their land, presently in the general range of $25,000 per lot until their leases expire in 2064. The lease payments are adjusted every twenty years. These lot lessees also pay property taxes to the Band similar to those in Salish Park. They enjoy the same benefits extended by the Band, and leaseholders can vote in City elections.