As Ski Season approaches, Buyers tend to turn their attention to Buying Real Estate in Ski Resorts.
My thanks, this week, go to Peter Borszcz of Pihl Law Corporation, here in Kelowna who has put together a timely reminder of some of the issues you must consider when purchasing or selling a property at a ski resort:
- Unique Titles and Leaseholds – some examples of these include the leasehold strata units of Snow Pines, the Restrictive Covenants on titles preventing competitive ski businesses, or the Easements to allow for use of adjacent ski runs or lifts.
- Use Restrictions – Many buildings have both title and strata restrictions on how and when that building can be used and by whom, these should be fully reviewed and you should not make common real estate assumptions like “I can live in this unit full time” if its part of a resort strata hotel complex.
- Short Term Accommodation Issues – AirBNB and VRBO and other short term accommodation managers are very common on ski resorts, but be careful about assuming that you can proceed to list a unit on these popular sites. Many titles and strata bylaws will contain mandatory in house manager clauses and prohibit an outside third party rental manager from being used.
- GST – Remember that GST is payable on every transfer of property unless there is an exemption available. If a ski resort property is only used by a single-family and otherwise left vacant, the used residential exemption likely applies, however, if that ski resort property has been placed in a rental pool, then commercial use will require accounting for GST. Smart Buyers always make an offer “GST Included, if any” on any ski resort purchase.
- Property Depreciation Reports and Home Inspections – Ski Resorts are lovely in the winter but in the spring and fall, they go through many “freeze/thaw” cycles which can play havoc with building systems. Always get a home inspection and pay very close attention to the property depreciation report to find a well managed and maintained a building.
- Non-Resident Vendors – The foreign buyers tax does not usually apply here, but the non-resident withholding on sale will still apply to Sellers. If your non-resident Seller has a mortgage on title, prior to listing ensure you have a fulsome conversation with their ability to pay out the mortgage, withhold the 25-50% required by CRA, and pay the closing costs and commissions.