Useful information

 

Priority Agreements

A Priority Agreement is a notation on a Land Title where one chargeholder has chosen to grant priority over its prior registered charge to a subsequent chargeholder.

In most cases, a Priority Agreement is registered by a lender (bank) holding a mortgage which requires priority over a previously registered mortgage. One of the most common situations where this occurs is where a developer has used a secondary lender to finance the early stages of development and, once the development has proceeded to the building stage, an institutional lender (major bank) has lent additional funds to finish the project. In most cases, the institutional lender will require, as a condition of lending a Priority Agreement over the first lender.

From a Buyers perspective, most Priority Agreements on a Land Title are of little consequence on the purchase of residential real estate as the standard contract of purchase and sale require that all financial charges be discharged. As the Priority Agreement are linked to the charges (in this example the Mortgage) they reference, the Priority Agreement is discharged along with the Mortgage.

 

Land Tax Deferment Act Agreements

Certain qualifying property owners can enter into an agreement with the Province of British Columbia to defer the payment of property taxes on the owner’s primary residence. The program is primarily directed toward seniors and parents of dependent children who are facing financial hardship to assist them to stay in their family homes.

The general criteria are as follows:

  1. Be 55 years or older, a person with a disability (or a surviving spouse of one of these persons)
  2. Be a Canadian citizen or landed immigrant and British Columbia resident
  3. Equity of at least 25% in your home (note: based on Assessment Value) and have a current property insurance policy

A second category, for families with children, was introduced in 2010, and you must:

  1. Be supporting a dependent child
  2. Be a Canadian citizen or landed immigrant and British Columbia resident
  3. Equity of at least 15% in your home (note: based on Assessment Value) and have a current property insurance policy

The following properties are examples of residences that are ineligible:

  1. Homes owned by a corporation
  2. Homes on first nations lands (for example: Westbank First Nations)
  3. Second residences or vacation residences
  4. Homes owned “in trust” by Executors or Trustees (for example after the home owner has died)

Where there are two or more joint owners, only one owner needs to meet all the qualification criteria.

After receipt of your current tax notice, apply by filling out the government form.

Upon accepting your application, the government places a Land Tax Deferment Act Charge on title and the property owner’s property taxes (but not utility charges) are deferred and no dealings (including sales or refinances) can happen until the property owner removes the Land Tax Deferment Charge (and repays the property tax plus interest and fees owing).

Importantly, while the charge is on title, re-mortgaging or re-financing the property (where a new registration is required on title) with a Land Tax Deferment Act Charge cannot occur (as the Government will not grant priority to the bank mortgage). Property owners are well advised to do any refinancing prior to entering into a Land Tax Deferment agreement. If you are re-financing after placement of a Land Tax Deferment Act Charge, please ensure that you have sufficient proceeds on hand to payout the all deferred property taxes, interest, and application and renewal fees.

You can payback all deferred property taxes, interest, and application and renewal fees at any time without penalty. When you sell your home, it must be paid back in full and this is one of the charges that your lawyer will arrange to payout on conveyance.

Jas Sandhu

Jas Sandhu

REALTOR®
CENTURY 21 Coastal Realty Ltd.
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