October 11, 1996
(Government Services and Lands)
No change in Market Value Pricing Policy for
Crown lands
The Market Value Pricing Policy for Crown lands was recently
reviewed by Cabinet at the request of cabin owners in the
province.
Ernest McLean, Minister of Government Services and Lands, said
today that government has decided not to make any changes to the
policy.
Mr. McLean said: "The Market Value Pricing Policy is a
good policy for leaseholders and a good policy for the owners of
all Crown lands - the people of Newfoundland and Labrador. It
brings the price of acquiring land in line with that of the
private sector and reduces government's regulatory role
associated with the maintenance of long term leases. However,
government has no intention of taking back Crown land from any
cabin owner who is truly unable to pay fees within the designated
time frames. In cases of hardship, government will deal with
individuals on a case by case basis. It is important, however,
that everyone who has to submit an application before the October
31, 1996 deadline do so."
All cottage, residence and commercial leaseholders may convert
their leasehold interests to freehold grants under the former
Crown land pricing policy provided they submit an application to
government by a specified date. A leaseholder whose lease was
issued prior to October 31, 1991 has until October 31, 1996 to
submit an application. A leaseholder whose lease was issued after
October 31, 1991 has five years from the date of issuance of his
or her specific lease to comply with the lease conditions and
apply for the grant.
In June of this year, all leaseholders were mailed information
packages which outlined how they may be affected by the policy
and the options that are available to them. Any leaseholder who
has not received this information package should contact the
nearest regional Crown Lands office or Government Service Centre.
Contact: Rick Callahan, Director of Communications, 729-4860
BACKGROUNDER
Crown Land Market Value Pricing Policy
COMMERCIAL LEASEHOLDERS
- People with commercial leases issued prior to October 31,
1991 are given the opportunity to convert their leases
(rented property) to grants (ownership), provided the
land is developed and the grant application is received
by the department on or before October 31, 1996.
-
The
cost of the grant will be set at assessed or fair market
value with credit being given for lease rentals paid,
less an administration fee of $25 for each year the lease
is in effect.
-
People with commercial leases issued after October 31,
1991 are given the opportunity to convert their leases to
grants, provided the land is developed and the grant
application is received by the department on or before
the fifth anniversary of the date the lease was issued.
The cost of the grant will be the same as described
above.
-
Leaseholders whose lease does not contain a rent
review clause may continue to pay the rental rate
specified in the lease for the remainder of the lease
term. However, should the leaseholder not take advantage
of this opportunity and choose to convert the lease to a
grant after October 31, 1996, the cost of the grant will
be the same as described above, except credit will not be
given for rentals previously paid.
-
Leaseholders whose lease contains a five year rent
review clause may continue to lease at the rate specified
in the lease until the rent review anniversary. At that
time, the lease rentals will be adjusted to 20 per cent
of the fair market value. After paying the new rental
rate for five years, the leaseholder will be entitled to
receive a freehold grant at no further cost. Credit will
not be given for rentals paid prior to the rent review
adjustment.
-
All applications will be subject to the payment of an
application processing fee of $107 (GST included) and a
legal document fee of $200.
RESIDENTIAL LEASEHOLDERS
- People with residential leases issued prior to October
31, 1991 are given the opportunity to convert their
leases (rented property) to grants (ownership) at the
former scale of fees, provided a residence is constructed
on the land and the grant application is received by the
department on or before October 31, 1996. The cost of the
grant will be $1,500 or the assessed value of the land,
whichever is more advantageous to the leaseholder.
Previously paid lease rentals will be credited towards
the grant cost.
-
People with leases issued after October
31, 1991 are given an opportunity to convert their leases
to grants, provided a residence is constructed on the
land and they apply for a grant on or before the fifth
anniversary of the date the lease was issued.
-
Leaseholders who do not take advantage of this
opportunity can continue to pay the rental rate specified
in the lease for the remainder of the lease term.
However, should the leaseholder choose to obtain a grant
at any time after October 31, 1996, the cost will be the
assessed/appraised value of the land in place at the time
of application. Where assessment/appraisal information is
not available, the cost will be set at $1,500. Credit
will not be given for lease rentals paid.
-
All applications are subject to the payment of an
application processing fee of $107 (GST included) and a
legal document fee of $200.
COTTAGE LEASEHOLDERS
- People with recreation cottage leases issued prior to
October 31, 1991 are given the opportunity to convert
their leases (rented property) to grants (ownership) at
the former scale of fees, provided a cottage is
constructed on the land, and the grant application is
received by the department on or before October 31, 1996.
The cost of the grant is $2,500 or assessed value of the
land (if municipal assessment data is available),
whichever is more advantageous to the leaseholder.
Previously paid rentals will be credited towards the
grant cost.
-
People with leases issued after October
31, 1991 will be given an opportunity to convert their
leases to grants, provided a cottage is constructed on
the land and they apply for a grant on or before the
fifth anniversary of the date the lease was issued.
Previously paid rentals will be credited towards the
grant cost.
-
Leaseholders whose leases contain a five year rent
review clause may continue to pay the rental rate
specified in the leases until the rent review
anniversary. At this time, the lease rentals will be
adjusted to 20 per cent of the assessed/appraised value
of the land. Where government assessment/appraisal
information is not available, rentals will be set at a
minimum of 20 per cent of $3,000 for waterfront property
and a minimum of 20 per cent of $2,500 for land not
fronting on water.
-
Leaseholders whose lease does not contain a rent
review clause, may continue to pay the rental rate
specified in the lease for the remainder of the lease
term. However, should the leaseholder not take advantage
of this opportunity and choose to convert the lease to a
grant after October 31, 1996, the cost of the grant will
be the assessed/appraised value of the land in place at
the time of the grant application or the minimum rates of
$3,000 for waterfront property and $2,500 for land not
fronting on water. Credit will not be given for rentals
paid .
-
All applications will be subject to the payment of an
application processing fee of $107 (GST included) and a
legal document fee of $200.
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