The Town of Banff is investigating what effect Parks Canada’s elimination of a compensation clause in residential leases may have on the community – but Parks Canada said the clause was taken out about 15 years ago.
The review comes on the heels of a Banff homeowner bringing concerns to council’s attention about a compensation clause being removed from their lease, which expired on March 31, 2014.
Council directed administration to research the issue, review any changes to leases that might affect property in Banff and bring back a recommendation on whether the Town of Banff should comment to Parks Canada on this matter.
“For me, first and foremost, I need information because there’s a change in the lease that people seemed to be surprised by, but this is the first I’ve heard of it,” said Banff Mayor Karen Sorensen.
“I need to get educated on this. Was there a change, when did the change happen and is there an impact on our residents so that we can then decide whether the Town of Banff needs to take a position?”
Parks Canada refused an interview request by the Outlook on the issue, and instead provided an email statement.
Park officials wrote that wording changes are completed for new leases over time to reflect changes in legislation, regulations and to modernize terms.
“Parks Canada’s residential leases have been consistent across its network of parks, with the compensation clause not being used in its standard leases since the mid to late 1990s,” wrote the agency.
“New residential leases contain a ‘vesting of improvements’ clause related to lessee improvements, consistent with Treasury Board policy. Other than the absence of the compensation clause and wording changes to reflect new environmental legislation, residential leases have remained essentially unchanged since that time.”
Parks Canada says the vast majority of active Parks Canada’s residential leases that still have a compensation clause are in the Town of Banff and Municipality of Jasper.
“Parks Canada always issues a new lease or renewal upon expiry for residential leases for lessees in good standing,” they wrote.
If Parks Canada residential lessees dispute any of the covenants and other provisions in their lease, or the interpretation of the lease, lessees are able to file a statement of claim with a court.
“As the majority of residential leases are for 42-year terms, and all leases do not have the same end date, the modernized leases are issued as leases expire. Parks Canada has not issued standard residential leases with a compensation clause for the past 15 years or more,” they wrote.
“The compensation clause has never come into effect or been used, as Parks Canada always issues a new lease or renewal upon expiry for residential leases for lessees in good standing.”
The unnamed Banff homeowner, who raised the issue with Banff council, said they were disillusioned to see revisions in the lease language when they received their new lease documents.
A clause in the old lease essentially indicated that when the term of the new lease expires, the government will pay compensation to the lessee for all improvements then existing on the land based upon the then fair market value of such improvements.
The lease no longer contains this clause.
“I believe that it is only fair that my new lease must also contain an undertaking to pay compensation to the lessee for all improvements existing on the land based on the fair market value of such improvements at the end of the term of the new lease,” they wrote to council.
“Banff is an expensive place to live, and I have significant life savings invested in my home. It is only fair that I should have the right to be compensated for my investment if the federal government should decide to expropriate my property in the future.”
Banff lawyer Eric Harvie, whose practice deals with commercial and residential leases, said he has long advocated that the Town of Banff and the Province of Alberta should be more involved and concerned about lease renewals and lease terms and conditions.
“We work hard to create a strong and lasting community – but our community has an underlying foundational crack, namely what would happen if the national park leases were not renewed or renewed on terms that essentially devalued the market for Banff leasehold estates?” he said.
“This is not something I lose sleep over, as Parks Canada Agency, I believe, understands what is at stake and largely has done a good job of lease renewals – but those who do long-term municipal planning have to ask the question, and to date I have seen very little of that.”
