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LEASEHOLD TITLE
In 1995 the Kamloops Indian Band made an important economic development decision and voted by a landslide margin of 74% to sell this leasehold interest, allowing a portion of its reserve land to be reverted back to the federal government for leasing. Today this prime parcel of real estate overlooking the city of Kamloops and South Thompson river has become Sun Rivers, one of Canada's most innovative resort communities. Experts consider this lease agreement to be one of the most comprehensive and secure ever established.
While Sun Rivers holds the 99 year head lease over the 460 acre parcel, the head landlord is 'Her Majesty the Queen in right of Canada' (the crown).What this means is that the leasing agreement is supported by the authority of Her Majesty the Queen. The lease has been structured to most fully protect the investments of the homeowners, the investors, the lenders and Sun Rivers.
The head lease is for an initial 99-year term, one that commenced July 1st, 1996 and will end in 2095. This date however, will be amended as final development of Sun Rivers nears completion. The amended end date will be June 30, 2115. In effect, the earliest parts of the Sun Rivers Community have a total lease of up to 119 years.
FULLY PREPAID LEASESun River's 99-year term leases are fully prepaid. No further lease payments will be due for the entire term. As long as the Homeowner pays the common costs and taxes and complies with the terms of the Homeowner Agreement, there should never be concern as to the security of the Homeowner's legal interest in the Sun Rivers Community. This type of opportunity of home ownership is common in many parts of Canada, Florida, Europe, and southwest U.S.A. A well-known example is the Resort of Palm Springs, in California where 9,920 acres of the City Limits are within the Indian Reserve Lands. With other nearby areas having similar arrangements such as Cathedral City 3,360 acres, Rancho Mirage 800 acres and in Riverside County 18,240 acres [totaling over 32,320 acres]. Some of the finest golf resort communities in North America have been developed on leasehold land.
Precedent Setting Master Development and Servicing Agreement
The Kamloops Indian Band and Sun Rivers created the leasehold interest in the land subject to detailing the terms and conditions in a precedent setting Master Development and Servicing Agreement. These terms and conditions relates to how the development would proceed and how services would be provided. The agreement covers all the kinds of things important in building a new community such as permitted uses, the development approval process, building inspections, parks, environmental matters, heritage matters, property taxes and more. This ensures certainty and consistent quality.
The creation of this comprehensive development and servicing agreement along with the precedent setting clauses within the leasehold interest is what sets the Sun Rivers leasehold interest apart. The intricate process of establishing such a comprehensive Master Development and Servicing Agreement was conducted with great confidence, and with respect to the reputable standing of the Kamloops Indian Band. "Comfort Clauses", the first of their kind included in any First Nations Agreement are a significant part of our understanding and agreement with the Kamloops Indian Band.
Unique Comfort Clauses Set Precedents for Developing First Nations Lands
1. Quiet Enjoyment -" no interruption or disturbances to Sun Rivers in its peaceable and quiet possession, holding or enjoyment of the Lands during the Term".
2. Good Faith/Agreement Prevails if Conflict; -"all parties will act honestly and in good faith in connection with all matters within the scope of this Agreement, in event of any conflict the Terms of this Agreement will prevail."
3. Unrestricted Motor Vehicle Access-"in the event of any roadblocks or disturbances of any nature to any publicly traveled roads within the Lands, the Kamloops Indian Band agrees and will immediately request that the police take any and all necessary and appropriate legal actions to ensure removal of such roadblocks or disturbances ".
4. Taxation-"Kamloops Indian Band (KIB) has agreed that the Community Lands will be assessed and taxed on the same basis as other designated lands on the Reserve and that the mill rates (including Homeowner Grants) used to determine Property Taxes will be reasonably comparable to those in the City."
"This lease sets the benchmark for the kind of leasehold title the market is looking for," says Georg Schurian, President of Sun Rivers Development Corporation. “We took our time and together with the Kamloops Indian Band addressed all of the issues that made the older forms of lease unattractive."
Schurian's professional relationship with the band, coupled with the Band’s economic and social objectives and their 30 years experience in administering a leasehold portfolio valued at more than $100 million, has given him no doubts about the agreement's conclusiveness.
Frequently asked questions:
1. What exactly is a pre-paid lease and who pays it?
At the time you purchase your interest in the lot of your choice, Sun Rivers will have paid the lease in full up front. At Sun Rivers there are no further lease payments during the entire 99 years. In fact early buyers will have the benefit of the development period as well. Unlike the Musqueam lease and others which have annual lease payments, there are no further payments owing during the entire term of the Sun Rivers lease.
2. Who owns the Land?
Title to the lot remains in the name of the federal government and has been assigned to Sun Rivers for a period of 99 years plus the development period. This is very similar to resort communities in Palm Springs, Arizona, and many Okanagan locations. Buyers at Sun Rivers buy a subdivided piece of the leasehold title.
3. Are there monthly costs?
There are no monthly costs related to the lease, this is all paid up front for the full 99 years. However, similar to a strata-title development all owners pay a reasonable common area maintenance fee which provides for the resort level of maintenance to parks, entrance and water features, trails, street light decorations etc. Residents in our adult communities and town home neighbourhoods will pay additional costs of common area maintenance, individual lot landscaping and other convenience and lifestyle services that may be part of their neighbourhood.
4. How are property taxes levied and paid?
Under our Master Servicing and Development Agreement the Kamloops Indian Band has retained the responsibilities of local government and like any municipality will provide certain services to Sun Rivers and collect property taxes. Services are provided through a number of arrangements with service providers such as the new water treatment plant, City of Kamloops and Sun Rivers Services. Homeowners are assured through the agreements that taxes will be:
1) reasonably comparable to the City of Kamloops,
2) set based on assessments conducted by an independent third party, and
3) eligible for homeowners grants.
5. What if one party wants to change the terms?
This lease is a legally binding contract and cannot be changed without the consent of the parties. Further, the lease contains clauses that provide assurances to the leaseholders that in the event of future changes in laws, or by-laws which may conflict with our agreements that the agreements would prevail. This provides the certainty and security required for investment.
6. Is the access to Sun Rivers a public road?
Sun Rivers has obtained approvals from all necessary levels of government for the full term of the lease to ensure Sun Rivers' residents have full and unrestricted access to the community. Permits are in place for the full term of the lease from the federal and provincial governments as well as the Kamloops Indian Band.
7. How do I know this lease is secure?
The lease is a legally binding contract entered for the mutual benefit of the Kamloops Indian Band, the Federal Government and Sun Rivers. The Kamloops Indian Band voted by a landslide margin to sell the leasehold interest and allow the lands now known as Sun Rivers to revert back to the federal government for leasing. The head landlord is Her Majesty the Queen in Right of Canada (the crown).
8. Can Sun Rivers homes be mortgaged?
Yes. Most major banks and Canada Mortgage and Housing Corporation have approved the leasehold interest for financing under the same terms as conventional financing on fee simple lands. Eligible buyers can finance their homes with as little as 5% down.
9. What do Kamloops Indian Band leaders have to say about the Sun Rivers Development?
Chief Bonnie Leonard, 'The obvious certainty and security to homebuyers at Sun Rivers is derived from the fact that the development is within the existing reserve boundaries of the Kamloops Indian Band. There is no claim to be settled on that parcel of land. It is well-settled and undisputed reserve land. The Sun Rivers Development is a well planned,
quality community that attracts the prudent investor. The golf course is challenging and scenic and must be played to be truly appreciated."
Former Chief Manny Jules, "Future generations will look back on this lease and say the community had the foresight to deal with these matters in a forthright manner, and one which took into account all the different scenarios ,The leasing agreement is supported by the authority of Her Majesty the Queen."
Freda Jules, KIB Lands & Housing Manager, "The fact that the Sun Rivers lease is a long-term prepaid lease 99 years plus the remaining development period assures security and certainty to homeowners. With the lease, the band and Sun Rivers tried to forecast a lot of what ifs' and looked many, many years down the road. We now have a development improvement process and a design criteria bylaw that parallels those of a municipal
system. The agreement with Sun Rivers ensures that once all the subleases have been sold, there is certainty that the improvements - buildings, infrastructure and so on - will maintain a first class standard. Lease and property tax revenues from the Mount Paul Industrial Estates and Sun Rivers maintain a consistent annual revenue for the Band. Maintaining this source of revenue is one of the long-term economic development initiatives of the Band. When Sun Rivers' development is complete it will be a community the size of a town like Chase. I can see that it will be in the Bands' and the community of Sun Rivers best interest to renegotiate and renew the lease, I can't imagine everyone packing up and leaving in 113 years.
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