Well known for their sense of humour, the Belgians have forged a solid reputation as pranksters that sticks to their skin. Also, when Van Roey, a Flemish real estate developer, imagined a revolutionary solution to allow clients to become owners, even though they could not afford it, many wondered if he should be taken seriously. Well ! he wasn’t joking. What stratagem had he developed?
Rental and construction
It all starts with a real estate developer who buys a large piece of land. Customers rent a plot of it on which they build a house. They only own their home. Regarding their plot of land, the promoter gives them seven years to acquire it. By postponing the purchase of the land, the initial down payment required decreases, thus favoring those who have difficulty obtaining a mortgage loan. Could such an operation happen again in Quebec?
Some possibilities
Without carrying out exhaustive research, we are able to affirm that the construction of a house on rented land is possible in Quebec. However, the possibilities are rather limited. They are found in mobile home parks, in several campgrounds and in government zecs (Zones d’Exploitation Contrôlée).
Differences between Belgium and Quebec
In the cases mentioned above, it is a question of building a house, but not of buying the land. This is an important distinction between the Belgian promoter Van Roey’s project and the situations that we see in Quebec. Neither mobile home parks, nor campgrounds, nor zecs 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 a zec, received a letter from a local financial institution offering him this opportunity. So the possibility exists.
We contacted mortgage brokers to find out their opinion on the subject. Many fell from the clouds, having never dealt with such files. However, Mr. Charles-Antoine Boudreau of Planiprêt mentions a case in a ZEC where the owner had succeeded in obtaining a mortgage loan.
“But it’s on a case-by-case basis between the customer and the financial institution,” he added. We, the mortgage brokers, do not intervene in such a transaction. »
In conclusion
Obtaining a mortgage loan to build or buy a house on rented land in order to reduce the initial down payment is not impossible. A few financial institutions agree to grant a mortgage loan. However, in all the cases we have mentioned, none subsequently became the owner of their land.
The zecs, properties of the Quebec state, will certainly never be sold. However, this is not the case with mobile home parks and campgrounds. If the landowner decides to change the use of his property or to dispose of it in favor of a real estate developer, those who own houses on leased land may be forced to buy. For buyers, this is an imponderable, but many do not hesitate to take the risk in order to live in the place they have chosen.
TIPS
- At the municipality’s urban planning department, consult the zoning where you intend to rent land in order to find out about the future uses of the territory and question the officials. They meet many people and often have very useful information.
- Present your project to the adviser of the local financial institution.
- Asking for financial assistance from a loved one to help you raise the required down payment is another option.