99yr Leases

[PureCountry]

Curious to know if any of you have experience with long-term leases, 99yr and the like. Have a chance to wrap up some pasture land with a relative who doesn't live in the area, and has always said it'll be ours as long as he and I are breathing. We'd like to put something on paper, but I want to get some ideas down before we consult a lawyer.

Any thoughts, experiences or words of wisdom?

[farmers_son]

When you say "we" does the relative/landowner feel the same way? It is one thing to tell someone they will be renting land for as long as you live and quite another to formalize the arrangement with a very long term lease. A long term lease would affect the landowners ability to sell or mortgage the land if his/her circumstances changed.

People are not real good at visualizing far enough ahead to a point when they are no longer breathing. I would think if either of you died the arrangement would come to an end. Sometimes we do not live for as long as we plan.

There is a history of long term agricultural leases in rural Alberta. Typically the energy industry uses long term leases to gain access to the surface over their minerals. I note these Surface Leases are for terms of 25 years or less with a provision for renewal. I am not sure why the leases were done this way...there may be legislation or common law that restricts the length of agricultural leases in Alberta. See excerpt from Land Titles Act below, I suspect leases cannot be for more than the term of a life, therefore 20-25 years with renewal.

You should be aware that any lease (other than energy company surface leases, after all this is Alberta) will be wiped from the title if the land owner does not pay the taxes and the property goes through the Tax Recovery process.

You might be interested in this excerpt from the Alberta Land Titles Act:

Leases
Requirements of lease
95(1) When land for which a certificate of title has been granted is intended to be leased or demised for a life or lives, or for a term of more than 3 years, the owner shall execute a lease, in the prescribed form.

[PureCountry]

Everything I've found thus far states that in a long-term lease - and it was stated that the most common were 25, 50, 75, 99 and 150 years - the tennant is always responsible for paying the taxes on the property. The tennant pays their agreed upon rate, pays the taxes, but has the security of having the property for a longer time frame, making it easier to justify costly investments to property improvements.

The landowner on the other hand, has nothing to worry about. Steady revenue that he/she can budget for, and no worries for the taxes. The only glitch I can see, is the one you mention f_s - what if they want to borrow against the property? And to be honest, I don't know that they don't already have a lien of some type against the property.

[farmers_son]

You can check the title by going to the Alberta Registries web site:

https://alta.registries.gov.ab.ca/spinii/logon.aspx

Click on Guest, then I Agree, then Search, then Titles and Registered Documents, then Standard ATS. Type in the land location (it is backwards to the way we usually see land locations) then mouse over to the icon that looks like a blank page to the right of the particular title you are interested in. Click on the blank page icon, it will show you all the documents registered against the title.

[Muttley]

If you are going long term, I would suggest making a clause that allows for you to tranfer to the next generation and for a cluase in the event of your death.