Can you build your house on rented land?

Can you build your house on rented land?

Known for their sense of humor, Belgians have earned a solid reputation as pranksters that sticks to their skin. Also, when Van Roey, a Flemish real estate developer, envisioned a revolutionary solution that would allow clients to become owners even though they could not afford it, many questioned whether it should be taken seriously. So! he wasn’t kidding. What strategy did he develop?

Renting and building

It all starts with an investor who buys a large piece of land. Buyers rent a plot on which they build a house. They only own their home. As for their plot, the proponent is giving them seven years to acquire it. By delaying the purchase of land, the required initial payment is reduced, thus favoring those who have difficulty obtaining a mortgage loan. Can such an operation be repeated in Quebec?

Some possibilities

Without conducting extensive research, we are able to confirm that building a house on leased land is possible in Quebec. However, the options are quite limited. They are located in mobile home parks, in several campsites and in government buildings (Zone d’Exploitation Contrôlée).

Differences between Belgium and Quebec

In the cases mentioned above, it is about building a house, but not about buying land. This is an important difference between the Belgian promoter Van Roey’s project and the situations we see in Quebec. Neither mobile home parks, nor campgrounds, nor rabbits sell their land (except for a few campgrounds).

Get a mortgage

Few financial institutions agree to grant a mortgage loan under such conditions. However, last year a friend of mine, who owns a chalet in Zec, received a letter from a local financial institution offering him this opportunity. So the possibility exists.

We contacted mortgage brokers to get their thoughts on the subject. Many have fallen from the clouds, because they have never dealt with such files. However, Mr. Charles-Antoine Boudreau of Planiprêt mentions a case in ZEC where the owner was able to obtain a mortgage loan.

“But it’s case by case between the client and the financial institution,” he added. We, mortgage brokers, do not intervene in such a transaction. »

In conclusion

Getting a mortgage loan to build or buy a house on rented land to reduce the down payment is not impossible. Few financial institutions agree to approve a mortgage loan. However, in all the cases we mentioned, none of them subsequently became the owner of their land.

The rabbits, property of the state of Quebec, will certainly never be sold. However, this is not the case with mobile home parks and campgrounds. If the owner of the land decides to change the use of his property or dispose of it in favor of an investor, those who own houses on the leased land may be forced to buy. For buyers, this is a no-brainer, but many do not hesitate to take risks in order to live in the place they have chosen.

TIPS

  • At the municipal planning department, consult the zoning where you intend to rent the land to find out about the future use of the territory and question the officials. They meet a lot of people and often have very useful information.
  • Present your project to an advisor at a local financial institution.
  • Another option is to seek financial assistance from a loved one to help you raise the required down payment.

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