Know risks of buying on First Nations land

Sunday, September 28th, 2008

Ask lawyer to study bylaws, liability before you sign

Tony Gioventu

Dear Condo Smarts:

I bought a two-bedroom condo on First Nations land a few years ago.

It was the right price, location and the management worked incredibly well. Other owners who had been there for two years happily endorsed the place. My real estate agent said it was just like any other condo except it was a lease for a long-term period.

Well, here I am four years later, and our maintenance fees have exploded to more than $650 a month, everyone is arguing over who has responsibility over different repairs, we never receive any minutes of meetings or information from our managers, and several building emergencies have been left unattended for days, resulting in serious damage.

Is there anyone we can go to for help or intervention on behalf of all of our owners?

— LM

Dear LM:

Buying or leasing property on First Nations settlements is complicated and comes with risks that each buyer must evaluate before they enter into an agreement.

An apartment or condo on a First Nations development, in most circumstances, is not like buying any other condo.

You are not buying a piece of property; you are leasing a home that is not regulated by provincial laws that apply to strata properties. The developments are often created as associations or societies or companies under the Business Corporations Act.

They are regulated by the constitutions and bylaws of that act, which is your limited protection to operations and governance.

In one particular First Nations project I recently reviewed, the annual costs of operations, management and financial planning is conducted solely by the elected board, not by the collective owners.

Owners were surprised when the board decided to hire an administrator for $90,000 a year, hiking up monthly fees by $100 a month.

You and your fellow owners need to contact a lawyer who is experienced with real estate transactions, contract relationships and the governance function of the companies or associations that were created to operate your development.

Potential buyers need to seek legal advice regarding the transactions, contracts and operational governance of the development before they sign on the dotted line.

It can be difficult and costly to fix a problem after you have completed the deal.

Closely review the bylaws for items that many of us take for granted. Check the procedure on financial approvals; who has the authority to change or alter the agreements; who controls the decision making; and how frequently financial information is reported to the owners.

Find out what happens when a dispute arises and how it will be settled. Don’t forget insurance issues. Clearly understand who has the insurable interest in the property and who has liability.

Not all lease agreements are created equal. Many First Nations developments function extremely well, but don’t assume they all operate under the same bylaws and regulations.

Tony Gioventu is executive director of the Condominium Home Owners’ Association (www.choa. E-mail him at tony@

© The Vancouver Province 2008

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