In clause 6.2 of the standard Alberta Country Residential Purchase Contract (the “Contract”), the buyer makes a promise to the seller that they are eligible to purchase “controlled lands” as defined in the Foreign Ownership of Land Regulations (Alberta) (the “Regulations”). But what does that even mean?
To ensure Alberta’s land and resources are primarily owned and enjoyed by Albertans and other Canadians, the government enacted the aforementioned Regulations. The Regulations aim to strike a balance between encouraging economic investment from foreign entities while ensuring prime rural lands remain available for Albertans and other Canadians.
Essentially, under the Regulations foreign citizens and foreign controlled corporations can own or beneficially own up to 2 parcels of controlled land not exceeding 20 acres in total. This means, if you are a Canadian citizen or a permanent resident (i.e. landed immigrant) then you are not affected by the Regulations and need not worry. But what constitutes “controlled land”?
The Regulations defines “controlled land” as land in Alberta that does not include:
- Crown land;
- Land within the boundaries of a municipality (i.e. city, town, village, hamlet, etc.); and
- Mines and minerals.
The rules are quite strict regarding ownership or beneficial ownership of controlled land within Alberta by foreign citizens and foreign controlled corporations. A breach of the Regulations can lead to significant consequences. Some penalties for breaching the Regulations include, but are not limited to, the following:
- The Citizenship Act (Canada) sets a penalty for the breach of the Regulations, which is a fine of up to $10,000.00 or imprisonment of up to one year or both;
- Judicial sale of controlled lands acquired contrary to the Regulations; and
- The Criminal Code sets a penalty of up to 14 years imprisonment for swearing a false declaration.
Given the importance of this subject and its corresponding consequences, the Contract requires the buyer to ensure they have the ability to purchase controlled lands in accordance with the Regulations (clause 3.1(i)). This determination should be made prior to submitting an offer for the purchase of the home. If a prospective buyer needs assistance to make this determination then they should contact their legal counsel to assist them.
If you have any questions concerning the Regulations then please do not hesitate to contact Khemka Law or counsel of your choosing. If there is a topic you would like us to cover then please let us know! We are always here to assist you. Thank you for taking time to read this Thursday Tidbit.
Sincerely,
Pranav Khemka
Pranav Khemka, Barrister & Solicitor
T: (403) 457-9577 | F: (403) 457-9578
E: pkhemka@khemkalaw.com
LEGAL: This Thursday Tidbit provides general information only and does not constitute legal advice. Circumstances may vary and no lawyer-client relationship is established from the use or reliance of this information. You are strongly advised to seek any legal advice by directly contacting Khemka Law or counsel of your choosing. Khemka Law does not warrant or guarantee the quality, accuracy or completeness of any information found within this Thursday Tidbit.