Purchasing Property in PEI - An overview of rules and regulations

                                                                                         

Land acquisition in PEI is controlled by the Lands Protection Act. To understand the need for the act one must only look at the relatively small amount of land to be found on PEI and the desirability of that land. PEI was originally broken into sixty-seven twenty thousand acre lots. These lots were originally deeded to absentee owners and it took many decades for local people to gradually buy the land back and reclaim their island. In the 1960's PEI was once again "discovered" by non-islanders, and once again islanders lost control of much of the more desirable waterfront tracts. Through the 70's restrictions were placed on non-Island ownership of property until in 1981, as a result of a non-resident corporation's attempt to acquire 6000 acres, the current Lands Protection Act was enacted.

This short history lesson is only to make clear the background associated with the non-islander holding real estate on PEI but not in any way to suggest that it is difficult to buy here. The Act is administered by IRAC, the Island Regulatory and Appeals Commission, and there isn't really a significant difference in real estate purchases, islander or not, unless you are purchasing waterfrontage. Those wishing to buy more the 165ft of frontage on a body of water or a piece of land greater than 5 acres must apply to the Island Regulatory and Appeals Commission for approval. Should there be multiple names on a deed (married couple) then the limits are doubled and they may jointly own 330 ft of waterfrontage or 10 acres.

If your desired purchase is beyond the allowable then your realtor should place a condition in your offer to purchase that indicates that your offer is made conditional on IRAC approval being granted by the necessary date. In this way if your application is not approved you can claim a refund of your deposit. However the chances of approval for most applications are very good as the idea behind the Act is not to prohibit ownership of land but to safeguard island waterfront property from falling under the control of too few, and from unscrupulous development and developers.

It should be noted though that there are costs associated with the process that are commonly one percent of the value of the purchase as well as additional legal fees. Despite these extra costs, and particularly in the case of waterfront properties, the value of PEI land is such an excellent value that the small extra costs and steps are worth the effort and extra expense.

*This article is not meant to be a complete or authoritative discussion of land purchase on PEI but rather for general information. More information can be had and your further questions answered by visiting the IRAC web site at www.irac.pe.ca

About the author:
Author is associated with the Royal Le Page Country Estate – A PEI Real Estate company provides information about pei realtors, buying a pei real estate, selling a pei real estate, pei waterfront real estate.

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