November 14, 1996
(Government Services and Lands)

Crown Lands Market Value Pricing Policy:

More than 5,000 applications received The Crown Lands Division of the Department of Government Services and Lands has received more than 5,000 applications from leaseholders under the new Crown Lands Market Value Pricing Policy.

Ernest McLean, Minister of Government Services and Lands, said: "Government is extremely pleased with the response to the October 31 deadline. This response once again highlights the positive aspects of this policy, a policy that is good for leaseholders and good for the owners of all Crown lands - the people of Newfoundland and Labrador. The new Crown Lands Market Value Pricing Policy 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."

Applications received were as follows:

Contact: Rick Callahan, Director of Communications, (709) 729-4860.

BACKGROUNDER
CROWN LAND MARKET VALUE PRICING POLICY
(This backgrounder was issued October 11.)

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.

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.

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 leases do 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