Buying leasehold properties in Vancouver.
I have clients call me on leasehold properties all the time..Typically they are less expensive compared to others in the area and peak the interest of my client, due to their perceived affordability factor. There are a few things you should know, before considering purchasing a leasehold property and here are some of the questions you might need answered..
Here is an informative video blog my partner Ian Watt at www.ianwatt.ca did on Leasehold properties http://www.ianwatt.ca/ViewBlog/1779/
What is a leasehold Property Leasehold property ownership means that the purchaser does not own the land. The purchaser will own any improvements on the land, but is leasing the property itself from the owner.
In Vancouver this means The purchaser owns the structure and buildings on the land, but leases the land from the owner. This land is leased by the developer (called a head lease) for at least fifty years from the federal, provincial or municipal government, a regional district or an approved public authority (such as an native band, school board, university). When a buyer purchases a leasehold strata lot, they register an interest as a leasehold tenant. The buyer is assigned this right from the developer. When the first purchaser sells to the second purchaser, the first purchaser's interest is assigned as a tenant to the second purchaser, and so on. The buyer purchasing an interest under the lease is buying the right to occupy the property for the balance of the term remaining under the lease. With each subsequent year the term remaining on the lease diminishes. Where do I find a leasehold property in Vancouver?
In Vancouver you will find it to be most common in certain parts of the West End,of downtown Vancouver, False Creek typically along the seawall near Granville Island all the way to Monk Mcqueens and on the UBC grounds.
How do I finance a leasehold purchase? The banks aren't super keen to mortgage leasehold properties and typically require more down, usually a minimum of 30% is required as a down payment. So even though you can buy it for less money. You need more down to purchase the property.
Things to consider Terms, renewal procedures, rate reviews, and assignability are elements of the lease which a buyer should review with advice from a lawyer that is familiar with leases. There are other issues involved with purchasing a leasehold property that require further review and care. Not only should the title be searched, but a copy of the head lease should always be obtained. You should also ensure that you learn who will be providing services such as water, sewer, garbage and snow removal. How are property taxes collected? If you have more questions about leasehold properties please give me email me at kathystilwell@gmail.com or give me a call