What Happens if the City/Municipality Decides to Expropriate Land?

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Local governments, such as the City of Nanaimo, are empowered by section 31 of the Community Charter to expropriate land. Section 289 of the Local Government Act gives the same power to regional districts. Expropriation is the taking of land without the owner’s consent and is an exceptional power which isn’t often exercised. The Expropriation Act must be adhered to by the local government and covers procedural requirements to be taken, as well as compensation for the land itself and disturbance caused to the landowner. Local governments can expropriate in order to provide services for the benefit of all or part of the community or in order to provide any services which are considered necessary or desirable.

In 2011 Nanaimo City Council adopted bylaw no. 7130 to expropriate land along Bowen Road. The purpose was to improve the public road and to carry out the replacement of the Quarterway Bridge. The city was unable to acquire the land through negotiation, although negotiation is the preferred option. Local governments secure certainty of costs if able to negotiate a set purchase price, while under expropriation, expenses and damages to be paid to the landowner are much less certain. Local governments are statutorily obligated to pay the market value of the property plus reasonable damages for the disturbance caused by the expropriation – amounts that are challenging to predict.

After a decision to expropriate, the local government will need to physically inspect the land, as certain issues can affect the value of the property. Under section 6 of the Expropriation Act, notice of intent to expropriate the land must be given to the owner, as well as posted on the land itself. Section 32 of the Community Charter provides authority for a local government to enter and inspect the land. Section 290 of the Local Government Act provides the same power for a regional district to enter and inspect, as does section 9 of the Expropriation Act. Consent of the owner is not necessary, but the local government is responsible for paying any compensation related to loss or damage caused by entrance and/or inspection. In compliance with the Expropriation Act, the local government will conduct an appraisal of the market value of the land which would have been obtained had the owner sold under normal circumstances. Reasonable compensation to be paid to the owner must also be calculated, covering factors such as moving expenses, legal expenses, and potentially increased mortgage rates for the owner’s subsequent property purchase.

 

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Is a Strata Corporation Able to Disallow Residents Under a Certain Age?

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Strata corporations (“stratas”) are legal entities with all the powers of natural persons at full capacity. They’re often created to divide buildings and/or parcels of land into individually owned pieces, while the common land and amenities are owned together. Stratas have certain responsibilities under the Strata Property Act and Regulations, including being responsible for common expenses and disclosing Rules and Bylaws which apply to occupiers. Stratas also have the power to provide Bylaws for the management and use of the lots, including prohibiting occupants under certain ages.

Age is not a protected ground of discrimination under the Human Rights Code in the context of property purchases, but race and gender, among other factors, are included. Stratas have the power to disallow would-be owners who are not of a certain age. The Human Rights Code gives broader protection covering age-based discrimination to tenants, as opposed to owners. Stratas may only require that tenants be at least 55 years of age. They cannot require, for example, that tenants be at least 19 years of age, but the strata could require that owners be at least 19 years of age. Individuals who resided within the strata before the time that an age restriction bylaw was passed are considered ‘grandfathered’ in and may continue residing despite the new provision.

Age-based requirements can occasionally make it challenging for young families to find housing for purchase, but the Condominium Homeowners Association of BC reported that buildings with 19-plus age restrictions represented only a small portion of the overall market. Affordable and accessible housing is a developing area and age-based provisions may undergo further legislative reform in the future.

 

 

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The Speculation and Vacancy Tax Act

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The Speculation and Vacancy Tax Act

The Speculation and Vacancy Tax Act (the “Act”) was enacted by the British Columbia provincial government on November 27, 2018. The purpose of the Act is to combat speculation in the residential housing market and turn empty houses into homes for BC residents.

General Information about the Act

Unless exempted, all owners of residential property in designated regions must pay the speculation and vacancy tax (the “Speculation Tax”). The designated regions include most of the Capital Regional District and Metro Vancouver, the Cities of Abbotsford, Chilliwack, Kelowna, West Kelowna, and Nanaimo, as well as the Districts of Mission, and Lantzville.
Every owner of a residential property on December 31 in those regions must make a declaration by March 31 of the following year, even if the owner no longer owns the property.

The Speculation Tax is calculated as follows:
Tax payable = (tax rate) x (owner’s interest) x (assessed value of the property)

For 2018, the tax rate for all owners is 0.5%. For the 2019 calendar year and beyond, the tax rate will be 0.5% for Canadian citizens and permanent residents who are not members of Satellite Families (defined below). Foreign owners and members of Satellite Families will be charged a tax rate of 2%. “Satellite Families” are households who declare less than 50% of their total income for the year on Canadian income tax returns.

Owners who owe taxes must pay by July 2 of the year following the assessed year. For the 2018 calendar year, the Speculation Tax must be paid by July 2, 2019. Failure to pay on time may result in interest and penalties.

Exemptions
If an owner qualifies for one of the following exemptions, they will not have to pay the Speculation Tax. However, failure to declare will result in being assessed at the highest tax rate (2%), even if the owner would have otherwise been exempt. Below is a list of some, but not all, of the exemptions under the Act.

1. Principal Residence
Owners are exempt if the residential property is their principal residence. If owners own multiple properties, they can only claim this exemption for the place they lived the longest in. Spouses cannot claim two different places unless there is a specific reason, such as work, medical leave, or divorce. Foreign owners and members of a Satellite Family cannot claim this exemption. If the owners do not live in the residence for the necessary time, they may still be able to claim the exemption if they were absent for certain reasons, such as medical leave or residential care.

2. Tenants
If the property is occupied by a tenant for periods of at least 30 days and for a total of 6 months (3 months for 2018), the owner can claim an exemption. There must be a written tenancy agreement, unless the tenant has a non-arm’s length relationship with the owner (e.g. close friend of family member).

3. Under Construction or Renovation
If the property is uninhabitable for a period of at least 90 days due to construction or renovations, the owner may be able to claim this exemption. The owner must demonstrate that they have taken reasonable steps to ensure that the building activity continues without undue delay, or that any undue delay was beyond their control.

Other Information
The Speculation Tax is completely separate from an owner’s other taxes, including income tax, property tax, and the Vancouver Empty Homes Tax.

The Speculation Tax attaches to the owner, not the property. This means that a new buyer does not have to worry about hidden liability when they buy a house and that the seller may be liable to pay the Speculation Tax even after they sell a house.

Owners may be able to claim tax credits against any Speculation Tax assessed. BC residents who are not members of a Satellite Family get tax credits of $2,000 per property and per person, which means that the first $400,000 of a property will usually be tax free.

If you have any questions about how the Speculation and Vacancy Tax Act may apply to you, please contact Heath Law LLP at 250-753-2202 or toll free: 1-866-753-2202.

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Estate Planning & Risks of Joint Tenancy

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Estate Planning – Considerations when Adding a Child as Joint Tenant to your Property

Many parents put their children on title to their residence as a form of estate planning. While this can help avoid probate fees and possibly assist with ease of administration of an estate, the case of Gully v. Gully, 2018 BCSC 1590 [Gully], demonstrates that parents must be careful when adding children onto title to their residence.

In Gully, a mother added her son as a joint tenant on title to her Burnaby property. She did so based on legal advice she received, including that her estate could avoid probate fees. She did not tell her son that he had been added as a joint tenant to title of the property.

In August of 2017, the son, and his company, consented to a judgment of $800,000.00 in favour of Ledcor Construction Limited (“Ledcor”). Ledcor discovered that the son was on title to the property and registered their certificate of judgment on the son’s undivided half interest in the property.

The mother sought a declaration, amongst other things, that the son held the property on a resulting trust for her estate. The court found that the son did not hold the property on a resulting trust for the estate and permitted Ledcor to retain their judgment on title, ultimately stating:

 [24]        Ms. Gully took a risk in registering her son as a joint tenant on her property. Whether she was properly advised of that risk is not before me. However, once she made the decision to register an interest in the Burnaby Property in Mr. Gully’s name, third party creditors of Mr. Gully became entitled to register judgments against Mr. Gully’s interest in the Burnaby property.

If you would like to book an appointment with any of our estate planning lawyers, please contact Heath Law LLP at
250-753-2202 or TOLL FREE: 1-866-753-2202.

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Family Law – Property Division: What about Season Tickets?

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The recent Alberta court decision in McLeod v McLeod addressed the issue of whether season tickets to the Edmonton Oilers that were in the name of only one spouse was part of the marital property.

In this case the couple had determined an acceptable amount for spousal support and were proceeding with a divorce. However, the divorcing couple could not reach an agreement on how to divide their beloved Oilers season tickets. As the divorce would not be finalized for some time, and the hockey season was quickly approaching, the wife applied to court for an interim property order. An interim order is a temporary order that is made before the divorce is granted.

The tickets were only in the husband’s name and the couple had used them for 11 years, primarily for family enjoyment. The husband refused to allow the wife to use any tickets for the 2017/2018 season, arguing that they were not part of the matrimonial property because, as a season ticket holder, he was only entitled to a right to purchase the tickets. Despite this argument, the Court held that the season tickets were matrimonial property and would have to be shared between the separating couple.

The Court ordered that, for the 2017/2018 season, the couple had to equally share the season tickets. Under the terms of the Court order, the couple were required to alternate choices for game tickets, including playoff tickets.

 

If you need any legal advice regarding property division, or any other family law inquiry, please click here to contact us.

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My Rented Suite is Damaged – Do I Have to Pay Rent? Residential Tenancy Act

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You have signed a one-year lease for a basement suite. The top floor is also rented out by the same landlord to another tenant. You come home from work to find that water has come through the floor above and ruined a number of your personal items. Extensive work is required to return the suite to livable standards. The landlord begins this work by undertaking extensive repairs on the walls and ceiling. As a result, you cannot live in the suite. You move in with a friend and wait for the repairs to be completed. It is now the first of the month. Your landlord is asking for the rent.

Are you legally obligated to pay rent while you are not living in the suite?

As a renter, you are bound by the BC Residential Tenancy Act (the “Act”).  There are only 5 specific instances where a Tenant can refuse to pay the full amount of rent. A Tenant can refuse to pay the full amount of rent only when:

  • An Arbitration Board has given an order to reduce the rent;
  • The tenant has followed the proper procedure to claim money spent on emergency repairs;
  • The landlord has illegally increased the rent;
  • The landlord has overcharged for a pet or security deposit; or
  • The tenant and the landlord have agreed in writing to reduce the rent due to one of the other sections of the Act (e.g. ending the tenancy early).

Since your situation does not fall into one of the 5 categories, it appears that you would have to pay rent to your landlord. If you do not pay rent, the landlord is entitled to file a file a Notice which enables them to end the tenancy after 10 days. The landlord is able to file this notice the day after rent is due.

While it appears that you have to pay rent, there might be other options available to you. For example, 1 option is that you could file a claim for dispute resolution under the Act and seek a rent reduction.

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