BY GARY DAVIES, NW REGIONAL LANDS SPECIALIST, MNR
he question of what is the most appropriate form of tenure that best suits your business needs is one that all operators should carefully consider. At present MNR policy permits the authorization of commercial outpost camps via the issuance of a land use permit or Crown lease.
An objective of MNR’s Commercial Outpost Camps Policy is:
“To ensure the continued long term availability of commercial outpost camps and to grant land use occupational authority consistent with the needs of the operator.“
This will be achieved by maintaining influence over authorized outpost camps through the retention of Crown ownership, while granting land use occupational authority up to and including a Crown lease for a 20 year term for a commercial outpost camp, to provide operators with long term registrable title to facilitate business security, mortgage financing and capitalization.”
A copy of this Policy is available from the MNR on request.
The key characteristics of a land use permit and lease are:
Land Use Permit
Authorizes a land use, is not a form of tenure – cannot be pledged or mortgaged
Term – short term, up to 10 years
“right to use” for a specified purpose; does not convey any right, title or interest in the land and resources (e.g. trees, sand and gravel)
Registered leasehold interest – may be mortgaged (consent may be required);
Term – 20 year term
Survey required, at lessee’s expense
Both convey the rights and responsibilities as per the Trespass to Property Act and the Occupier’s Liability Act.
A land use permit and lease contain standard terms and conditions that bind the permit holder/lessee and the Crown.
These conditions address the following:
Rent/fee and payment
Rent dispute resolution (lease only)
Obligations of permit holder/lessee to maintain site
Payment of property taxes
Crown’s right to inspect site
Use as security for a mortgage (lease only)
Indemnification of the Crown
Access to site
Reservations to the Crown (e.g. trees, sand and gravel)
Comparison of Costs (rates current for 2006)
Land Use Permit vs. Crown Lease
|Land Use Permit||Crown Lease|
|Initial Fees||$245 (plus GST) (new site)||$300 + 1st year rent of 7% of market value of land (plus GST)|
|Survey Costs||Nil – no survey required||$1,000 to $4,000 per site (estimate only – location dependent)|
|Annual Fee/Rent||$125 (plus GST)||7% of market value of land (plus GST)|
|“Renewal” Fees||No provisions for renewal, new permit issued at annual fee upon approval||$200 + annual rent (plus GST) upon approval if option in lease|
|Assignment (transfer) or Mortgage Consent Fee||Transfer not permitted, new LUP issued upon approval to new owner of improvements; cannot be mortgaged||With consent of MNR; $200 (plus GST) fee per consent|
Maintaining Your Lease or Land Use Permit in Good Standing
In operating your commercial outpost camp on a site under lease or land use permit you must be aware of your responsibilities as laid out in the terms and conditions of the instrument. Remember that you have signed a legal agreement with the MNR. The MNR, as stewards of the Crown land, are responsible for ensuring all occupiers of Crown land adhere to these terms and conditions. MNR has made efforts of late to ensure all conditions are appropriate.
The MNR uses a variety of methods to monitor all land use permits and leases, including commercial outpost camp operator compliance. These include inspections and the use of self-reporting systems. Some operators have raised concerns*** regarding the “Crown Land Use Occupation - Occupier Self-Reporting Form” that have been arriving in their mail. The intent of these forms is to engage the operator more directly in the management of the resource by gathering up to date information regarding the state and nature of outposts in a cost effective manner. While there have been some inconsistencies with the use and the information being requested, MNR is working to ensure a consistent and fair approach where information is requested using this form. The information is used solely for the purposes of the compliance monitoring of the terms and conditions of the land use permit or lease.
For more information regarding land use permits and leases contact your local MNR district/area office.
***In March NOTO heard from several commercial LUP holders in the Sault Ste. Marie and Blind River area. Operators were quite concerned that the district MNR was asking them to provide a client list as part of the self-reporting exercise. NOTO has notified the district and regional MNR of the industry’s objection to providing confidential business information.
Although NOTO does not endorse the idea of sharing a client list with MNR, we are suggesting that operators contact their MNR office when they receive a self-reporting form to discuss other possible means of satisfying their requirements. Please call NOTO if you wish to discuss this matter further.
This article was taken from pages 12 & 13 of NOTO's "The Outfitter" publication, Spring 2006 Issue