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  • Writer's pictureNeil Sullivan

Prohibition On The Purchase Of Residential Property By Non-Canadians Act

By Neil Sullivan, Winnipeg Real Estate Lawyer


Residential Property


The Canadian government has introduced The Prohibition on the Purchase of Residential Property by Non-Canadians Act, a significant piece of legislation with the stated goal of addressing housing affordability and availability. At Sullivan McMullan, we pride ourselves on being the only law firm in Manitoba that practices real estate law exclusively. Our extensive experience with the application of this legislation ensures that our clients receive expert guidance and comprehensive legal support. Here’s an in-depth look at what this Act entails and its implications for the real estate market in Manitoba, with information current in 2024:

Understanding the Act

The Prohibition on the Purchase of Residential Property by Non-Canadians Act was enacted with the goal of mitigating the impact of foreign investment on Canada’s residential real estate market. The stated goal is to make housing more accessible and affordable for Canadian residents by restricting non-Canadians from purchasing residential properties.

Key Provisions

  1. Definition of Non-Canadians: The Act defines non-Canadians as individuals who are neither Canadian citizens nor permanent residents. Corporations and entities controlled by non-Canadians are also excluded from purchasing residential property.  However, spouses and common-law partners as well as students, work permit holders, refugees and others under certain circumstances may qualify to purchase residential real estate.    

  2. Scope of the Prohibition: The Act prohibits non-Canadians from purchasing any residential property within defined rural areas.  The definition of what constitutes residential property can get complex and the manner in which the applicable rural areas are defined is both complex and potentially fluid.  

  3. Enforcement and Penalties: The Act includes stringent enforcement measures. Violations can result in significant fines for any party assisting in an unlawful purchase and the forced sale of the property.  This could include sellers, realtors, lawyers, mortgage professionals, and insurers and, given the broad language, could in theory be extended even more broadly.

Our Quick Guide to This Act 

Possibly nobody in the legal community has done as deep a dive as I have into this legislation and the myriad of other Acts and underlying Regulations that The Prohibition on the Purchase of Residential Property by Non-Canadians Act references and draws upon.  It is strongly recommended that affected parties whether they are non-Canadians, as defined in the Act themselves or are transacting with parties who potentially might be, seek early legal advice. We have prepared a very detailed written Guide to this legislation inclusive of maps of affected areas and are happy to assist any party transacting in relation to Manitoba real estate. 

Implications for the Manitoba Real Estate Market

Buyers

For prospective buyers, particularly those who are non-Canadians, understanding the restrictions imposed by this Act is crucial. Non-Canadians looking to purchase property in Manitoba must seek legal advice to ensure compliance with the law. At Sullivan McMullan, we provide expert guidance to help navigate these legal waters and explore alternative options.

Sellers

Sellers need to be aware of the restrictions to avoid entering into contracts with non-Canadian buyers. Failing to comply with the Act could lead to legal complications and financial penalties. Owners of real estate should also be mindful that if they sell their existing property, they must still qualify to purchase a new one. Lawful owners of a home in Canada have sold that home and have been unable to purchase a new home due to this legislation.   

Investors

Real estate investors, especially those from abroad, must consider the limitations imposed by this Act. Understanding the legal framework is essential to making informed investment decisions. We offer comprehensive legal advice to help investors adjust their strategies and explore permissible investment avenues within Manitoba.

Scams

Do not engage in dealings where a person lawfully entitled to purchase in Canada offers to take title to a property in their name purchased with your money.  Not only is this unlawful and contrary to the spirit of the Act but your right to sue that individual to enforce what is likely an illegal contract is doubtful at best.

Sullivan McMullan: Your Real Estate Law Experts

As the only law firm in Manitoba that practices real estate law exclusively, Sullivan McMullan has unparalleled expertise in navigating the complexities of The Prohibition on the Purchase of Residential Property by Non-Canadians Act. Our extensive experience with this legislation allows us to provide tailored legal solutions that meet our clients' specific needs.

Why Choose Sullivan McMullan?

  • Exclusive Focus on Real Estate Law: Our singular focus on real estate law ensures that we have a deep and nuanced understanding of the field.

  • Extensive Experience: Our team has a proven track record of successfully handling cases involving the application of this Act.

  • Client-Centred Approach: We prioritize our clients' interests, providing personalized and practical legal advice.

Staying Informed

The real estate landscape and related legislation can evolve, making it essential to stay informed about current laws and regulations. At Sullivan McMullan, we are committed to keeping our clients updated with the latest legal developments and ensuring that their real estate transactions comply with all applicable laws.

Conclusion

The Prohibition on the Purchase of Residential Property by Non-Canadians Act represents a significant shift in Canada’s real estate regulatory environment. Whether you are a buyer, seller, or investor, understanding and complying with this legislation is crucial. At Sullivan McMullan, our exclusive focus on real estate law and extensive experience with this Act make us the ideal choice for navigating these legal challenges. Contact us for expert legal support tailored to your real estate needs.


 

Neil Sullivan is a real estate lawyer based in Winnipeg and has been a partner at Sullivan McMullan since its founding in 1996. With Sullivan McMullan being the only law firm in Manitoba that practices real estate law exclusively, Mr. Sullivan and his team are dedicated to providing expert legal services to clients throughout the province. This information is current as of the time of writing in 2024.


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