Testing the Waters: Transactions Involving Float Homes #540

Float homes can seem like great options for buyers seeking an affordable waterfront location. However, buyers considering purchasing their first float home may not be aware of some of the differences between such a purchase, and the simple purchase of a boat, or home on land. Here’s an overview of some differences to keep in mind if you want to “test the waters” and get involved in a float home transaction.

Financing and insuring a float home purchase can be more difficult when dealing with lenders or insurers new to this type of housing, requiring additional time and costs to gather the required documentation. Each marina has its own set of rules applicable to communal living issues, akin to homeowners’ associations or Stratas, but which may include unusual restrictions, so obtaining a copy of the rules early is advisable.  While the purchase price of a float home may make them seem like a bargain for waterfront property, ongoing expenses such as property tax, moorage, and maintenance costs can be steep. Buyers intending to renovate a float home, or add features such as decks or hot tubs, may encounter limitations in the marina rules, or the structure of the float home itself. Some municipalities have adopted bylaws with specific applicability to float homes moored in their jurisdiction, and such bylaws should be reviewed for any specific considerations.

The exact nature of the interest being conveyed with a float home can vary. Some float home purchases may consist of an assignment of a foreshore lease or sub-lease, and the assignment documents should be prepared by a lawyer familiar with such agreements. Other float homes may be attached to Strata lots, the transfer of which may attract property transfer tax. Further, GST may be applicable to the purchase price of a float home in some circumstances, so it is a good idea to recommend that buyers seek early tax advice, before any agreement for the purchase of the float home is signed.

One of the crucial considerations in purchasing a float home is, unsurprisingly, whether it floats or sinks. Buyers purchasing a float home will wish to obtain an inspection and a marine survey of the float home as a subject condition of any agreement to purchase it. Hiring a specialized inspector and an experienced marine surveyor to review the flotation and structure of the float home are worthwhile expenses. Further, lenders will usually require a recent marine survey in order to provide any financing.

Given the unusual nature of some of the issues described above, completing a float home purchase can take longer, involve more professionals, and include more transaction costs than the usual residential home purchase. Representing first-time float home buyers attracted by the unique waterfront lifestyle can be interesting and rewarding, but dabbling in such transactions can be risky.

Licensees should beware of acting outside their area of expertise, and ensure they have referred their clients to all the appropriate professionals early on. A good starting point reference for buyers and licensees alike is the website of the Floating Home Association of BC, which includes links to the British Columbia Float Home Standard, a list and map of marinas in BC, and lists of float home builders, insurers familiar with float homes, marine surveyors, etc.

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