With Americans unable to easily buy, sell or even visit their summer homes in Canada, there has been a significant impact on the real estate market. American owners of property in Canada may want to visit their property to inspect or secure it.
Others may be facing financial hardships in the wake of COVID-19 and may face the need to sell their property. What, if any, legal options do owners of cross-border real estate have as we face the prospect of the border closing extending into 2021? It is a question that our cross-border and real estate attorneys have received often since the border was closed to all non-essential travel in March.
With the U.S. to Canada border closed to all non-essential travel, if you are an American citizen with no direct relatives who hold Canadian citizenship and no essential business interest in Canada, you are out of luck. That hasn’t stopped people from trying to craft some creative end around to the rule and gain access to their Canadian real estate.
For example, can an argument be made that a summer home is an income or investment property, thus a form of a business and allow the owner access to Canada to maintain or prepare the property for sale? The short answer is no.
The Canadian government has created a largely airtight policy that doesn’t allow for loopholes in the rules. A dutifully registered real estate or investment business might have a case to be made, but an individual who owns a single property isn’t going to get a free pass from the government to cross the border under the guise of a business need.
Last month, Rep. Brian Higgins co-authored a letter to the Department of Homeland Security and the Canadian Minister of Public Safety and Emergency Preparedness requesting changes to the current rules to include the ability for property owners to cross the border to inspect and secure their property. Six weeks later, there has been no movement to ease the restrictions.
It is expected, though certainly not guaranteed, that the longer the travel restrictions are extended, the more likely the two countries are to offer some option to property owners giving them the chance to cross the border to inspect their property at least once. Until then, we advise all clients to monitor the Canadian government’s website for any updates.
Nicholas J. Ingrassia concentrates his practice in Real Estate & Development, Business & Corporate Law, Estate Planning, and Canada-U. S. Cross Border. He can be reached at 716.854.4300 ext. 285 or firstname.lastname@example.org.