Lease structure to be revamped at Crooked Lake
New property management aims to ease tensions with tenants
Cottage owners and the Sakimay First Nation leadership alike hope a new lease structure and property management company will allow cottagers to stay at Crooked Lake while also avoiding crippling rate increases.
Located about 170 kilometres northeast of Regina, Crooked Lake is nestled at the bottom of a lush green valley and is home to a provincial park and cottage land.
But tensions among cottage owners and the First Nation have been high ever since a lease rate increase was implemented in 2009, which was as high as 700 per cent for some.
The increase led to a class-action lawsuit between cottage owners and the First Nation and in 2016, a federal court judge decided in favour of the tenants and said the increases that high could not be imposed for a five-year period between 2010 and 2014. That decision is currently under appeal.
But Sakimay insisted tenants still pay the increased lease rate for the next five-year period of 20152019. When some cottagers didn’t pay, they had their leases terminated. Others paid their new rate but some filed a second class action for the 2015-19 period.
Hoping to avoid the conflicts of the past, last month, Sakimay announced all new leases will be managed by Basadinaa Property Management Ltd. — a subsidiary of Sakimay Management Authority.
Chief of Sakimay First Nation, Lynn Acoose, says anyone with existing leases who wish to transfer management over to the new company before their lease expires can do so.
Additionally, instead of a direct lease, new leases will be under a head lease between Sakimay and the Crown. Sub-leases will then be issued to Basadinaa which will then issue a lease to the cottage owner.
“Under Basadinaa Property Management Ltd. we look forward to establishing positive business relations with our tenants at Crooked Lake,” Acoose said in a news release.
UNCERTAINTY AND INSTABILITY
Current leases are set to expire between January 2019 and 2022 and Acoose said they hope to offer new long-term lease agreements through Basadinaa by the end of September.
Stan Frank, president of the Sheesheep Cottage Owners Association Inc., owns a back lot cottage. He said his rent didn’t increase as much as others have, but he’s heard from many about the frustration caused by the almost decade-long dispute.
That relaxation factor has really dropped over the last number of years because everybody’s up in the air.
Between the appeal and another pending class-action, Frank said many cottage owners are longing for the security of another longterm lease to either maintain their presence at Crooked Lake or be in a better position to sell.
“You buy a cottage, you build a cottage, you go there to relax. That relaxation factor has really dropped over the last number of years because everybody’s up in the air,” said Frank.
He said there are mixed feelings among cottage owners about signing a new lease with Basadinaa.
“They aren’t going to make everybody happy,” said Frank. “There’s always going to be somebody that’s going to be upset.”
Dale Keretesh is a sales representative with Century 21 Broadway Park Realty in Yorkton. While he only has one client on leased land at Crooked Lake, he said he’s heard concerns from others.
“I think there’s a fair amount of tenants down there that, with the uncertainty, are wishing to sell and get out while they can,” said
His client is looking to do just that. “They’re wishing to sell it,” said Keretesh. “They’re pretty uncomfortable with the situation down there.”
He said others are just waiting it out.
For those waiting, Frank said many are afraid to speak to media because they don’t want to jeopardize their situation and the potential to secure another long-term lease.
LOOKING BACK
Acoose said a surge in land values prior to 2009 prompted the lease rate increases seen at Crooked Lake, but said the cottage owners aren’t the only ones feeling the heat.
“We feel that impact because we’ve been acquiring land since 1993,” she said. “It’s not just the cottagers that have felt that impact.”
That said, Acoose said in hindsight she would not have made such a drastic increase to lease rates in 2009.
“I would have made a different decision entirely. However, I’m not the decision-maker. It’s the council that makes the decisions,” she said.
But she understands the need to make difficult decisions.
“It’s a pretty tough place to be when you’re a First Nation and the ... leadership are elected by our people to try to improve the quality of life for our people,” she said. “That’s the primary objective in our decision making.”
Acoose said the First Nation’s land department doesn’t have the management skills to properly advise chief and council on how to approach land appraisals, which were used to determine lease rate increases.
“It’s up to us once we get an appraisal to take that appraisal and analyze it and figure out the carrying capacity of our market,” she said. She said she would have gotten advice from someone in the business before deciding how much to increase lease rates and that Basadinaa was created to ensure that expertise is there to make better decisions in the future.
NEW MANAGEMENT
Under the new lease agreements with Basadinaa Property Management Ltd., lease rate disputes will be handled differently.
Acoose said owners will have to provide notice to Basadinaa if they do not agree with the rent adjustment and produce their own appraisal of the land.
“Collectively, the tenants can counter-offer,” she said. “Then we would have to produce a second appraisal from a different company. It’s like an arbitration process.”
Ray Reese owns a lakefront cottage on Crooked Lake. He and his family are permanent residents and he says he will pay whatever it takes to keep it that way.
“We would sign in a heartbeat,” said Reese. “Our opinion has been: sit down and have coffee with them and negotiate a settlement.”
Reese has been meeting regularly with the First Nation as member of the Sheesheep cottage owners association in hopes of coming to mutually beneficial arrangement without resorting to another classaction lawsuit.
He joined the association after the first lawsuit because he was unhappy with how two associations — Grenfell Beach Association and Sheesheep — were representing cottage owners and wanted to avoid another court case.
Reese says even though he’s not part of the second class-action lawsuit, he’s not worried about an unfair lease rate increase.
“We believe that Sakimay will establish a fair rate,” he said.
“In the talks that we’ve had with them and the offer that they made, just as recently as two years ago, they offered the lease lots for just under a 400-per-cent increase versus 720.”
Acoose said the First Nation is in the process of hiring a general manager for Basadinaa, hopefully to happen by mid-august.
Then, administrative staff will be hired.
She said the main difference between the old management system, which was operated through the First Nation’s land department, is that Basadinaa will have staff trained in property and lease management.
The company will also increase the capacity to deal with compliance issues like encroachment, dumping and delinquent lease payments.
Acoose said the outcome of the pending appeal and future classactions will determine the future of leased lots at Crooked Lake.
With a return rate of only $347,000 on their 324 leases if the courts side with the tenants, she said it may not be worth it anymore.