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Lease and Land Use Questions

Lease and Land Use Questions

How will the Referendum affect municipal control of land?
With a NO vote, the municipality has a greater amount of control over municipal lands because the municipality will always own the land and can make sure that rules and procedures it develops apply to each lot.

With a YES vote, the municipality will lose some of the control it has over municipal lands when it gives up ownership of lots to private buyers. This is because once a purchaser sells a lot to someone else, council can no longer enforce its land administration rules since the sale is taking place between two private parties, rather than council and a private purchaser. However, council will still be able to enforce its zoning by-law to control development on all community lots.

If the vote is “Yes” will council start selling lots in the community right away?
If the vote is “Yes”, residents are giving council the option to sell lands. Council is not required by a “Yes” vote to sell lots, and they do not have to start selling right away. The exception are those communities that have issued equity leases and have agreed that the lessee can obtain fee simple title if there is a “Yes” vote and all lease payments have been made. However it will take some time for the Land Administration By-laws to be amended and to implement new procedures.

How are lot prices set?
The lot prices in your community will be set by the land development costs in accordance with the Land Administration By-law and GN Land Policies. For existing lots, council can choose either market value or replacement cost as the method for setting the price. Market value is determined by a professionally qualified land appraiser or by public bids. Replacement cost is determined by how much it would cost to develop a similar lot in your community at today's prices.

What does the municipality do with the money it receives for selling or leasing lots?
The municipality will keep the funds it receives in an account called a Land Development Reserve Fund. The money that municipalities obtain from leasing or selling lots will be put into this account and used for developing new lots in the future.

Can council impose residency restrictions on the sale or lease of lots?
Council may impose reasonable residency restrictions on the sale or lease of lots.

Would there be any additional cost in taxes between leasing and owning?
No, there would be no increase in taxes if owned the land.

Would there be any additional cost incurred if we change between leasing and owning?
Land Administration By-laws and Zoning By-laws would have to be updated. Municipal Staff would require training and the GN and Municipalities would require legal advice.

If the vote is YES, does the person leasing the lot have to purchase?
As long as you are in good standing with the municipality and not in violation of your lease agreement, the municipality will renew your lease. You will not be forced to purchase your lot. A “yes” vote will give the municipalities the option to sell the lot to the lessee.

If you are not required to purchase, what is the implication when the lease is up for renewal?
As long as you are in good standing with the municipality and not in violation of your lease agreement, the municipality will renew your lease. You will not be forced to purchase your lot.

Where do I get the money to buy land?
If you do not have the money to pay cash for a lot, you could borrow money from the bank, in the form of a mortgage, just as you would borrow money to build a house.

Is it harder to get a mortgage for building a house on leased land?
This may have been true in the past, but banking institutions in Nunavut are accustomed to providing mortgages that are on leased land.

Will there be an impact on insurance?
No, there will be no impact on insurance.

What if council chooses to sell my lot and I do not want to buy it?
In the disposal of land to the public, councils have a responsibility to reflect the needs and priorities of the community and to apply fair and consistent practices. If the vote is YES, council cannot force a person to buy a lot when that person is unwilling or unable to do so.

Why should I buy my own land when we were already given the land in the Nunavut Land Claim Agreement?
The Nunavut Land Claims Agreement gives ownership of certain lands to designated Inuit Organizations. These lands can never be sold and will always be kept by the Designated Inuit Organizations for the use and benefit of the Inuit. The Agreement also gives ownership of community lots, within municipal boundaries, to local governments. The referendum only affects these community lots.

Why should I pay for municipal lands?
For a community to use land for housing, businesses, recreation, etc., lots must be developed. This requires planning and engineering, roads, gravel lot fill, drainage channels, power lines and poles, and legal surveys. The price that you pay the municipality to buy or lease a community lot will be based on these development costs.

Can council decide to sell some lots and lease others?
Council can only sell land if the vote is YES. Council will decide which lots are made available for sale. Council may choose only to sell lots in a specific part of the community, for example, a new subdivision. Any lots not identified for sale will be for lease.

Will the price of lots be the same throughout the community?
The price of lots may differ because council can take certain site-specific factors into consideration when each lot is priced. Council may increase or decrease the price of a lot by up to 25% because of its location, size, slope or other features. Council can also lower the price of lots when special situations occur.

How will this affect zoning in the city/hamlet? Will the homeowner’s rights change?
The municipality will lose some of the control it has over municipal lands when it gives up ownership of lots to private buyers. This is because once a purchaser sells a lot to someone else, council can no longer enforce its land administration rules since the sale is taking place between two private parties, rather than council and a private purchaser. However, council will still be able to enforce its zoning by-law to control development on all lots, public and private, within the boundaries of the municipality.

It will give homeowner’s more ownership rights.

Who can buy? Large corporations buying bulk land?
Any residents of Nunavut that are of 18 years of age can purchase land. Council may impose reasonable residency restrictions on the sale or lease of lots. With a NO vote, all lots could be available for lease subject to residency restrictions. With a YES vote, the sales of lots are only subject to residency requirements when council first sells the lots. Residency restrictions may apply after the municipality sells the land. Further research is required on this. Many jurisdictions in Canada have adopted residency requirements.

Who would be responsible for the transfer of ownership and legal fees?
Transfer of ownership would be the responsibility of the purchasee, municipality and Land Titles Office. The purchasee would be responsible for any transfer and legal fees.

Can past lease fees be credited to the purchase price if I buy my lot?
If the lessee has an equity lease the payments made will be made towards the purchase of the lot.

Owning our land vs leasing, what is the impact on liability?
People will become more protective of their land. Currently, lessees with equity leases have shown concern with development that is occurring adjacent to their lot and in their neighbourhood.

What are the financial effects of leasing land?
If you currently have a standard lease (make annual payments), you pay a lease fee for the use of the lot. At the end of your lease term, all of the fees you have paid stay in the owner's pocket. It is the owner who has equity (value) in the lot. If the value of property increases or drops in your community, you will not make any profit nor suffer any financial loss. When you lease, you are not subject to the financial risks or benefits of having equity (value) in your lot.

What are the financial effects of buying land?
If you have an equity lease or purchase land, you have equity (value) in the lot. If the value of property increases in your community, you will profit if you sell your lot at a higher price than you paid for it. If property values drop in your community, you will lose money if you sell your lot at a lower price than you paid for it. When you buy, you are subject to the financial risks or benefits of having equity (value) in your lot.

Is the purchase of the land for surface rights only?
Yes.

Who would be responsible for the clean-up of fuel spills on the property?
The general rule is that the polluter should pay and clean any contamination. Each situation would have to be assessed case by case.

Will there be any Bylaw changes as a result of purchasing property?
Land Administration By-laws would have to be reviewed and updated. Community Plans and Zoning By-laws may also have to be amended.

How would a decision to sale property affect condo owners?
The sale of property would not affect condo owners. The sale of a condo is only for the building and does not include the land.

Will regulations change be affecting building permits?
Zoning By-laws will be reviewed and there may be minor amendments.

Will there be restrictions on building on the land you purchase. Can I purchase a lot and hold it for future development?
Council must discourage land speculation by both businesses and residents. In other words, council will not permit anyone to get a lot or lots unless they need that lot for a home or business. Therefore, you cannot buy a lot and save it for the future. Whether you lease or buy your new lot, you must finish your building within 2 years. Council can give a one-year extension in special circumstances.

Is there going to be a restriction on who you can sell to and for what price?
Once the municipality sells the land, the price of the lot will be determined by market value.

Would surveys have to be conducted on everyone’s lots? Who would pay for the surveying? How would property boundaries be marked?
The only lots that can be sold are municipal titled lots. In order to raise title on a lot, it must be legally surveyed and the survey plan must be registered at Land Titles Office. The municipalities have been responsible for land development since 1996. Land Development costs include legal surveying costs.

How would lots for townhouses be determined?
There would be no change in determining the boundaries for townhouses.

Would there be property taxes? How would tax rates be determined?
Currently, property owners and lessees are taxed. The assessment value of a lot is determined by calculations performed by a professional property assessor. The value is determined by land development costs, size of the lot and the improvements on the lot.

Once purchased would lot improvements by the landowner be permitted? For example, fencing.
The types of development on a lot, such as fences, are determined by the zoning by-laws. There will be no changes if there is a “yes” vote.

If there is a YES vote, will those with equity leases be able to purchase their land?
Yes. If the lessee has paid the full amount of the equity lease and other fees, fee simple shall be transferred to the lessee as soon as reasonably possible without the lessee being required to pay any additional fees except for the costs incurred in completing the transfer.

If a land-lease has been paid in full, would the land still have to be purchased?
No but it would be in the lessee best interest to purchase the land.

Would currently empty lots be made available for purchase?
Municipalities will determine which lots will be available for sale. However, vacant lots that have been surveyed and where the municipality has obtained fee simple title can be sold if there is a “yes” vote.

Who will develop new lots in the community?
The municipalities have been responsible for land development since 1996. If there is a “Yes” vote, there will be opportunities to exam the possibilities of the contractors buying large tracts of land, which they will develop, subdivide and sell.

Where will municipalities get the money to develop lots?
Municipalities will be expected to pay for the development of new lots with money received from the sale or lease of lots which they have been doing since 1996.

If the referendum results in a YES vote, will the cost of developing land in Nunavut go up?
Land development in Nunavut is expensive under the present disposal method of leasing. We really haven’t had the opportunity to analyze this yet. CGS is optimistic that a yes vote could reduce the cost of land development and home ownership. Under leasehold title, the cost of registering mortgages is significantly more laborious than under fee simple title as it requires much more paper and legal costs to satisfy lending requirements. Fee simple title might actually contribute to reducing the cost of land development and homeownership.


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