The most desirable way to own land is called ‘freehold’. Of course that does not mean ‘free’ in any real sense but it does mean entirely owned, controlled, managed and occupied by the title-holder (kinda). People LOVE freehold. Weirdly, most people love the concept of freehold more than they do logic or common sense. They would prefer to own 1/8 of an acre freehold in a subdivision, one they can put a fence around, than they would like to own ten acres with a partner or a 100 acres with ten partners. Somehow, the term freehold bestows a sense of freedom, separation and independence from others.
It is not true, of course. If you have a 1/8 acre lot you own freehold and it is surrounded by 799 other ‘freeholders’ then you are actually sharing 100 acres with 799 others. In the city that means roads, sidewalks, building codes, design restrictions, fences, water, electricity and sewage at the very least. You may have a fence on your ‘freehold’ property but even that came with zoning and design restrictions. Your property is freely held in name and concept only. If you have any doubt about that, try not paying your property taxes or turning your home into a brothel.
There are other ways to own land. Strata titling can allow ownership in large tracts of land or apartments in highrise buildings. Strata titling is usually interpreted to mean that you own a box in or on a commonly owned property. In theory, one could remove one’s box from a stack of boxes (like containers stacked at a port) and go somewhere else but, in practice, your box (surveyed, mortgaged and insured) is permanently affixed to all the other boxes at construction and removal is impossible.
Then there are Co-ops. Co-ops are very much like strata titling except the unit you occupy isn’t actually yours. Instead, the unit is part of the common property and you own a share in the entity that owns the land and the living units. That should work for apartments but doesn’t work all-too-often simply because the rules of the co-op are established by the originators and they often put a lot of financial restrictions on it so that each member was not vulnerable to the financial problems that any one individual member might experience. The strata owner of a unit can go bankrupt but that would not affect others in the strata complex but, if a co-op member went bankrupt their share being sued might affect other members. Basically, co-ops are just harder to finance. Co-ops and Strata are similar but different.
And that brings me to corporate ownership…..the form of ownership we employed 49 years ago. Corporate ownership is much like Co-operative ownership, with the attendant early-owner drafted rules and restrictions, but the company format is a more easily understood concept (or it was at the time) and owning shares in a company that own the land made for a small amount of comfort in the event of a sale or the sale of a share. Corporate ownership is also same but different…..but mostly same as Co-op.
“Why bother with all that? Why not just buy freehold and be done with it?”
The main reason was that property OTG is not often subdivided into what is referred to as ‘bite-size’ (meaning affordable by one buyer). Land OTG is more often available in large chunks. Ours was 86 acres. A Co-op along the way on another island is 120 acres. A neighbour or two has 160 acres. When I was 26, I could not even afford a modest condo in Vancouver, let alone 86 acres of waterfront far away up the coast.
But me and nine others could.
After meeting with the ad hoc group that proposed forming a company to buy the land, Sal asked if I liked all the members in the room. “NO. I do not!” I liked three or four and I was ambivalent or non-judgmental over another four or five but I did NOT like two of the possible partners at all. “So, you think we shouldn’t buy in?” “On the contrary. I think we should. It doesn’t matter where you go, you will have neighbours. And some you will like and some you won’t. So, liking them is not an issue. The issue is that 10 shares of 86 acres provides us with 8.6 acres of separation. That is the kind of ratio that allows for space between us. We cannot afford 8.6 acres any other way.”
As it turned out, some of the original shareholders changed their minds and wanted to sell later on and so we bought them out. Eventually, six of us remained the only shareholders. My share is, theoretically now, 14.3 acres. In reality it is more like one square foot or inch in six square feet or inches. Everything except our building site is ‘common area’.
In a weird twist the Regional District restricted (at the time) lots to a minimum 10 acres which might have dictated that we would be limited to eight shares but that new regulation allowed for two homes on each 10 acre parcel. So, maybe we could have 20 shares? In fact, a company can issue thousands of shares but the zoning might still restrict the number of homes to 20….it is all rather silly, actually. Especially when you consider that a large parcel adjacent to us is Crown Land and, when hiking through the forest, our separate parcels are indistinguishable. In real life, forest is forest.
Our governance, the Regional District, really does not care very much about us. They provide no services or amenities, no support or even on-the-ground presence. We have logging roads and some docks and that is about it. They don’t care. And, even if they did care, they have violated their own rules any number of times. We have some one acre parcels cheek-by-jowl with 160 acre lots. They are not consistent. More to the point: they do not want to care. They do not want to provide service. The tax base just isn’t there to pay for it.
“Why mention all this, Dave?” Because most people have a conventional mind-set when purchasing real estate. That ‘mind-set’ involves realtors and listings and house inspections, financing and insurance. That mindset carries over…..and little of that urban mindset applies out here….well, not in the conventional sense, anyway. Realtors are not interested in working to sell a remote site at a lower price than a nearby condo…too much trouble and expense for them. Most houses would not pass a house inspection because most of the systems are ‘cobbled’ to fit the circumstance. Some old places still have outhouses. We have a stream. Some have a well. Others catch rainwater. No one has conventional Hydropower. There is no ‘professional’ fire protection or police. We do not have roads that actually go anywhere…..
…this is much more…free….hold.
Moving OTG is different. Really different. A lot of conventional real estate purchasing thinking is inapplicable and, more to the point, unworkable. Just the property’s orientation to the sun is a different requirement! This OTG ‘difference’ using real estate as an example is just one part of the difference that a person moving OTG will likely experience, from building to food gathering, from social engagement and entertainment to the kinds of dogs you might have. Tools and machinery even take on a bigger role. I cannot honestly state that living OTG is like living in a foreign land but it is definitely a slightly foreign culture with many different life-adjustments to make it work.
Our Off the Grid Home 
Interesting topic.
Circa 1988, I looked at land on Cortes Island. I wanted freehold, not a share in a company. But I ended up offering on same. In the 1960s, 5 guys had formed a company and purchased 124 acres at Coulter Bay. They rolled the land into H. Ltd. The guy who was the founding father, so to speak, RC, was the one who first found the land and returned to Vancouver to propose a joint purchase to friends.
So, what these guys did, was to have H. Ltd. issue 5 shares, one to each of the group of 5. They sent in a surveyor and had five 20-acre lots mapped out along the waterfront. Share Certificate #1 had attached to it the right to exclusive occupation of “Lot 1” and so on. The waterfront was not all created equal. Some had more desirable attributes than other parts. RC got the pick of the litter and selected Lot 1. They promulgated corporate bylaws, one of which declared the 24 acres at the back of the parcel as a kind of common property which each could build a driveway across and each could fell and use a certain number of trees for house construction.
It came to pass that RC decided to sell his share. It was listed with a realtor, RS. I was on Cortes to look at some freehold land and ended up there overnight when a SE gale kept the Cortes ferry at the dock. The next morning, RS came to me and said he knew I was not interested in a corporate deal, but since I had time to kill, why not go for a nice walk on the property? Okay.
Well, it was a fine, sunny winter day. Lot 1 was a low bank piece with about 900 feet of west-facing waterfront. I started to soften my views about freehold being a sine qua non. RC wanted $85K for his share. I asked RC what would be the price if it was a subdivided 20-acre lot with its own title. He thought maybe $125K. I was warming to the idea even more.
Anyway, I offered RC his price. Then all hell broke loose. There was dissent in the corporate ranks. One of the insiders, LC, wanted Lot 1. Others did not want it, but did not LC to have it. Lawyers were retained. It dragged on. In the end, LC got the share, I accepted cash from RC to walk away, once again resolving to not buy into a company.
But, the company purchase retains its appeal of simplicity (apart from annual meetings, corporate registry filings, etc.). It avoids the complexities, costs and, often, impossibility of subdividing. Local governments require one to jump through many hoops to subdivide. That can include proving water and septic, dedicating land for access to the sea; building road to access the lot(s); archeological studies; the placing of restrictive covenants and statutory building schemes, to name but a few.
I’ll add that, unlike freehold, I never encountered a bank that would take a mortgage of a company share. I had to borrow to build. Come to think of it, I had to borrow to buy my lot. I paid it off and borrowed against it again when building.
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Five of our six members are original. The sixth share changed hands about six years into it, I believe, making the new #6 only 43 years long-in-the-title. Just about every rule we ever dreamed up turned out not to be practical or necessary. One of the members was insistent that we adopt a ‘no aluminum siding’ rule. Sheesh. Another more pertinent rule was that our building site was to be restricted to a 75 foot radius (approx 17500 sft) but our topography made finding a half level circle of that size impossible. What has transpired is more organic. We kind of ‘use’ a natural site and my usage is less than that. In fact, everyone’s usage is less than that. Another rule was that we could not build in such a way as to obstruct anyone walking on the beach or within 50 feet of the high water mark. The first guy to build didn’t read that and he built too close. “Meh” everyone said. “Oh, well, it’s done. What’s done is done”. Life went on.
And, anyway, there is no place on the beach that anyone can walk for more than about fifty feet. The topography simply prohibits anyone walking the shoreline. My point: our city-mind rules didn’t work. Our ‘live and let live’ rules do. Everyone gets along just fine. That’s 49 years of getting along!!!!
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A very interesting topic.
Thanks for the info.
The “50 foot set back from the waterline” is interesting.
In the Maritime provinces…No One “owns ” the beach between low and high tide lines…..
Anyone can walk up in front of your 10 million dollar mansion on the beach and sit, swim, bbq and play volleyball.
Much to the chagrin of out of province or out of country owners.
Arguments, threats, Police are called.
To no avail.
The “tideline” is free to the public.
That being said.
I had a friend who “owned” 3/4’s of a cabin and property on Gambier Island.
4 buddies bought the thing in the 1960’s.
Deaths, divorces, etc …and he ended up “owning” 3/4’s of the property.
The last guy refused to sell at no matter what the cost .
And the deal was “Ownership = time”
My friend could stay 3 weeks out of 4 each month.
Summertime was very popular.
“Mr 1 Week” would show up. Party, trash the place. and leave the place a mess….
“Mr 3 weeks” would have to clean it and start all over.
This went on for several years.
I told him.
“Give the keys to some bikers and tell them to stay for a month….free.”
They can’t make any worse of a mess than that A-Hole
I knew some scary Biker guys with girlfriends and kids.
They loved it.
Mr One Week showed up with his family and friends……
They sent him packing.
He called the cops. They couldnt care less.
He called Mr 3 weeks to complain,
“I will rent to these guys until Hell freezes over”.
Problem solved.
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That was a nice way to solve things! Remind me never to mess with you while we have that BBQ, or you might send some of your friends over to pay me a visit 😉
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I guess most of us stick to the idea of freehold, because we all feel the need for “our own space”, where we feel we can decide for ourselves what to do.
But we onw our peace of land (freehold). When we bought our house, it was surrounded by trees. In the back of our house was a big free plot, so we had nice unobstructed views. Untill the plot was sold to a developper, who subdivided it into small lots. Lots of houses were built in our “backyard”
Then all of my new neighbours with adjacent land to our house started to complain about our trees. So in the end we had to cut all of our trees. This was like 7 years ago.
Last year the owner of the house to the left side of us died. So her house was sold to a young couple. They move in, 2 weeks later they ring our doorbell and ask if we would mind to cutting the trees between our 2 houses.
Another reason why I want to move OTG…I am fed up with my neighbours
So even freehold does not garantuee that your neighbours will ot complain and harrass you
I would not mind corporte ownership if the plot was big enough and my neighbours nowhere in eyesight
Saw a nice plot of land on one of the island, was about 128 acres and could be subdivided into at least 20 lots. I could subdivide and keep a few lots for myself and then sell the rest to partners….
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@ wim
“Another reason why I want to move OTG…I am fed up with my neighbours”
+++
Yeah.
The older I get the less patience I have with people.
10 or 20 acres with lots of trees between me and my noisy neighbors would do the trick.
50 -100 acres would be even better….
🙂
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Long ago, my wife and I bought 1.6 acres on the ocean on Pender Island. At the time, we were living on a 33-foot lot in Vancouver. I thought of 1.6 acres as a fiefdom. Land as far as one can see. How much more does one need? The eventual answer? A lot.
Other lots nearby had been sold, but none developed.
Before long, the Calgary folks on the next lot built. We naively thought that anyone buying such a thing would value privacy, trees, keeping things natural. We expected like-minded neighbours. Wrong-o. First, they clearcut their lot and trucked in loads of fill to create about an acre of level lawn. Then they put up the 4,000 square-foot Lindal house. It was okay, but with no more trees, quite visible. Then came the big, white, 12-foot satellite dish for all to admire. Next came the gulag light – a mercury vapour light on a tall pole that came on every day of the year as dusk arrived and stayed on all night. Illuminated our place and all of that end of the island. Then came the grandkids, who shot out the windows of our van with a BB gun. There were other joys of their presence over the years. That included the fact that the statutory building scheme prohibited any construction that came closer than 25-feet to any lot line. Their 2-car garage stood 11 feet from the common boundary. When I pointed that out to the building inspector (best to buy OTG where none of those lurk), his attitude was “what’s done is done”. Most of the time no one was there, which was nice, so little noise, except for the caretaker arriving to mow the grass every week.
The neighbours’ drilled well was maybe 100 feet from ours and their well was closer to the ocean. That did not stop them from running 2 sprinklers night and day to keep the grass green during our dry, gulf island summers. They regarded the aquifer that served that area as their personal property, to be abused at will. After we left, I heard their well became unusable due to salt water intrusion. No surprise.
After a few years, the next lot uphill from us was built upon. It did not take ’em long to start a forest fire when burning some brush. The local volunteer brigade managed to put it out.
Now, happily ensconced on 50 acres, with closest neighbour about a mile away. Much better.
As wimdegendt commented, a corporate deal can be okay if one of the rewards is more space. That tends to be the case. Most I have encountered are large parcels as I found on Cortes. 5 people sharing 124 acres. All had privacy. In their case, there were other issues, but lack of private space not one of them. Dave and Sally are similarly situated. 84 acres and 6 owners. No one in their face. And, happily, harmonious relations for 49 years. No need to resort to guerrilla warfare tactics so nicely described by Nonconfidencevote.
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Dave’s thread immediately preceding this was introduced with a good dose of anti-Trump sentiment and garnered 25 comments within a few days. This thread is languishing by comparison. Is it too late to breathe life into an otherwise moribund thread by adding a soupçon Trump to it?
Maybe it should have been intituled: Purchasing Land OTG – Trump Notwithstanding.
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I guess the numbers bear you out. One blog was better received than the other. I, personally, thought the Trump piece was a really interesting thought provoker..you know…a guy campaigning a revolution virtually? By way of Twitter? A fake, TV-style West Wing drama rather than with tanks and missiles? And yet, that part of the Trump blog seemed to drift away.
I wrote it up wrong, I guess. I appreciate what comments there were on that but I am personally gobsmacked over a ‘virtual’ rebellion, a fake insurrection, a Hollywood set-up complete with drama, intrigue and windows being smashed. Written and directed in concert with FOX News!!
To me, it was a really cheap B movie that was purposefully set in motion by a cheap B conman-potus. Trump casting himself in a reality TV show?!!. That’s stunning if true. Could anyone be that Machiavellian?
As for the real estate……some readers want more on ACTUAL OTG topics and I even like writing about them…it is just that I tend to write about what I am thinking about currently and I have a friend OTG thinking of selling, a few readers thinking of buying and a relative currently selling.
Right now, real estate is ‘in my head’….and it made me think….and so I wrote….
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In my opinion, there is nothing wrong with your writing. It is our perception of what you write. I guess our perception is also guided by our mindset the moment we read your blog. If I am looking now for some land in your area, I will perceive the blog differently then when I am not looking for land (yet).
So the fact that most of us did not pick up the previous thread, is maybe because we don’t see his plot yet like you do.
And this is 1 of your strong points : you blog triggers us to look at subjects in a differen matter
And that’s 1 of the reasons why I am one of the ‘magnificent) seven
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Thanks, Wim. You are NOW the most magnificent of the seven! Mind you, I am capricious and any complement can turn my head.
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A variation of Descartes “cognito, ergo sum” – I think, therefore I am. For you it’s “I think, therefore I write”. And you small band of readers and commenters appreciate that!
I see the topic of your thinking as quite timely. I will be interesting to see the trends in OTG real estate in the next few years. As you know, I have a particular interest right now.
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I think I’m more ,
“Legi et scribere sine cogitatione”
“I read and then write without thinking”
(Latin thanks to Google translator).
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