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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.

1996 10 11   11:30 a.m.

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