Real estate brokerage in Indigenous territory

Real estate brokerage in Indigenous territory works very differently than in the rest of Québec. 

In carrying on his activities, a real estate broker must take into account his aptitudes and the limits of his knowledge. A broker who wishes to act as intermediary in a transaction involving an immovable located in Indigenous territory must be knowledgeable about the specific rules and restrictions that apply, so that he can do a better job of informing the parties objectively. The detailed description sheet, for example, could lay out the restrictions and conditions specific to the sale, lease or financing of an immovable of this nature. 

Following is a broad outline relating to this field of practice. 

Possession

An Indigenous person is legally in possession of land in an Indigenous community if such land has been allotted by the band council, with the approval of the Minister.¹

An Indigenous person can also be in possession of land in an Indigenous community if the Minister issues a “Certificate of Possession.” This certificate can serve as proof not only of possession of the land, but also of the possibility of residing in or building an immovable on the land.²

Real estate sale

A real estate broker may act as intermediary in a transaction involving an immovable located in an Indigenous community, but this will not involve a title transfer, as the immovable is owned by the Crown. The federal government keeps a register of the lands of each Indigenous community.³ The resale of an immovable by a member of the community is usually done via transfer of the Certificate of Possession, which acts as a property title. 

In his role as intermediary, the real estate broker must be aware that an Indigenous person can only transfer possession of an immovable to the band of which he is a member or to another member of this band.⁴ The market being restricted to members of the same band, the pool of potential buyers will therefore be limited.

In addition, each band council may enact by-laws governing the residence of band members or other persons fromthe Indigenous community. In addition to being aware of the additional restrictions regarding the territory on which the immovable is located, the real estate broker must mention them to any potential buyer to ensure the latter’s ability to comply. 

Leasing

The Minister may be applied to for the issuance of a “Locatee Lease” on behalf of a band or an individual who holds a Certificate of Possession, as long as it complies with federal laws and the by-laws of the community concerned. Prior to issuing such a lease, the Minister will consult with band councils to recognize their interests in the use and development of the lands on their reserve. 

The real estate broker must be mindful of the fact that an occupant cannot allow a third party (a non-band member) to occupy, use or reside on a reserve under a lease, as the latter is void.⁵ This being said, sub-letting is possible as long as it meets all the requirements of the main Lease and complies with the by-laws of the Indigenous community. 

Financing

Getting the financing needed to acquire a right to possess or build an immovable can prove more complex, as the person who has possession does not have ownership. Conventional financial institutions will therefore hesitate to extend financing, since neither the building nor the land can be seized by the institution in the event of default as they are owned by the Crown.⁶

Thus an Indigenous person who wishes to secure financing will have to explore alternate sources, such as the band council or the First Nations Housing Program of the Aboriginal Savings Corporation of Canada (ABSCAN). To facilitate the transaction, the real estate broker may need to provide information on the various sources of financing available.

Services 

Indigenous peoples and bands are exempt from taxation in respect of the ownership, occupation, possession or use of an Indigenous community or of transferred lands.⁷

GST and QST also do not apply to the provision of brokerage services to Indigenous persons, bands or band-empowered entities, if such services are provided entirely in an Indigenous community. Likewise, taxes do not apply to services that are provided outside of an Indigenous community, but that concern real estate interests located within one.⁸

¹ Indian Act, s. 20 (1).
² Indian Act, s. 20 (2).
³ Indian Act, s. 21.
⁴ Indian Act, s. 24.
⁵  Indian Act, s. 28 (1) and fol.
⁶ https://ici.radio-canada.ca/espaces-autochtones/1030593/chronique-juridique-les-reserves-indiennes-ces-terres-de-sa-majeste
⁷ Indian Act, s. 87 (1) and (2).
⁸ https://www.canada.ca/en/revenue-agency/services/aboriginal-peoples/information-indians.html#hdng15