Frequently Asked Questions
There have been many questions as to why the lot leases are going up this year and the three following years. In order to understand the reasons, we need to look at the structure of Wesley Acres and the requirements imposed by Canada Revenue Agency (CRA).
Wesley Acres Inc. (WAI) is a charity which owns the Wesley Acres property and buildings. A charity under Canadian Tax Laws is not allowed to operate a business.
The trailer park on Wesley Acres property cannot be operated by charity. Consequently, an entity, separate from Wesley Acres Inc., was created to operate the trailer park.
Fortunately, when Wesley Acres put this structure in to place, we already had the Wesley Acres Campground Committee (WACC) set up to oversee the operation of the trailer park. WACC was changed from a committee of the WAI board to the board of a new company, Wesley Acres Trailer Park Inc (WATPI). WATPI is owned entirely by WAI so that the operation of the trailer park and ministry could all operate under control of WAI.
1. How could this be accomplished?
The structure today, is that WAI is a charity which owns WATPI and appoints the directors or board. As a charity WAI may not direct the operations of WATPI. WATPI leases the trailer park land from WAI and operates it as a for-profit business.
2. Who is responsible for what?
WAI is responsible for the property and the buildings. They fund and direct the ministries on the grounds and have a staff both full time, part time and seasonal to carry out the ministries. Added to this responsibility, it is no secret to anyone familiar to the grounds, that many of the buildings need significant maintenance, repairs and updates.
WATPI pays rent to WAI under a head lease for the use of the trailer park land. Some facilities and staff are shared by both organizations. This sharing of facilities and staff saves both boards from costly duplication. They are responsible for sewers, hydro, water treatment system and lot maintenance and basically all things required for lot lease holders to enjoy their experience at Wesley Acres. In order to carry out these duties, WATPI collects lease payments for trailer lots, including mobile-home lots. This money is used to pay the head lease, staff, and all operational costs for the trailer park.
3. Why are rates being increased? How do rules governing charities affect rent charged to leaseholders?
Wesley Acres Inc. is a registered charity. WAI owns the land that is leased to lot leaseholders. One of the rules for charities is that it may not confer a benefit to anyone. So rental rates should be at market rates. Rental rates in other trailer parks have been increasing significantly, but the rates at Wesley Acres have not kept pace.
4. Shouldn’t rent at Wesley Acres be less than elsewhere since it isn’t available to public at the large because it is a faith-based constraint, the road presents challenges and the Park lacks some of the amenities of other parks?
Wesley Acres has advantages and disadvantages when compared with other trailer parks. The Board has taken these into account in prayerfully determining the market rental rates for the Park.
5. Does the Government regulate rental rates? Are these increases legal?
The Residential Tenancies Act regulates rents, but it does not apply to trailer parks. At Wesley Acres, it only applies to the rental of mobile-home lots where the mobile home is used as the leaseholder’s permanent residence. There are only 9 leaseholders for whom their mobile home is their permanent residence. In those cases, the leaseholders are not required to pay the rent increases. But many of them have agreed to pay the increase (including all that are on the board and the Executive Director.)
6. Can rental rates be further increased during these 4 years?
The Board does not intend to further increase lot rental rates within the next four years. But the composition of the Board will change each year, and circumstances may change. Board decisions may be changed at a subsequent meeting.
7. Are dock rentals being increased also?
Not at this time. But the Board may review these next year.
8. Could the board subsequently decide not to implement these increases?
The composition of the Board will change each year, and circumstances may change. Board decisions may be changed at a subsequent meeting.
9. Is the Administration Fee on the sale of a trailer or mobile being changed?
The Administration Fee on the sale of a trailer equal to the greater of 5% of the sale price or $500 will continue to apply. No Administration Fee on the sale of a mobile home by a permanent resident is permitted under the Residential Tenancies Act, so no Administration Fee will be charged on the sale of a mobile home. But, since the Residential Tenancies Act does not restrict the amount of rent that may be charged to a new leaseholder, the rent charged to a new leaseholder who purchases a mobile home will not be limited to the market rates described in these documents.
10. Won’t these increases result in less giving to Ministry?
That is possible. Individuals should prayerfully consider their charitable donations and give accordingly.
11. What if I don’t agree with my lot size, or some of it is not usable?
The new lot rental rates are based on the same size for your lot as was used for the former lot rental rates. The charge that is based on the size of your lot only applies to the area in excess of 1000’, which takes into account some unusable area and uncertainties in dimensions. Nevertheless, you may ask the office for a review of your lot dimensions. The charge for remeasuring your lot would be $50.
12. So why has my lot lease gone up sharply this year?
Back to the CRA requirements. In order to maintain its charitable status, Wesley Acres Inc. cannot provide a financial benefit to any party, be it person or group. This means that it must collect a fair market value head lease from WATPI or be at risk for losing its charitable status.
13. How was fair market value determined?
In the 2016 an accredited commercial appraiser did a survey to determine a fair market rental value of the trailer park. These figures were used to set the head lease for WATPI, thus demonstrating that WAI is not providing a benefit to WATPI. Since 2016, lease rates for trailer lots have increased dramatically. Furthermore, improvements have been made at Wesley Acres since 2016. Consequently, the WAI and WATPI boards determined that the rent under the Head Lease needed to increase.
14. How does the head lease affect my lot lease?
WATPI can only earn income through the lot leases, which is used to pay the increased rent under the Head Lease. This increase in lot lease rental rates also covers increasing operational costs.
15. If you had this information in 2016, why did not increases start immediately?
WATPI has been very reluctant to increase lot rental rates. Consequently, the rates have fallen well below other comparable camps. (The very high amount for which some trailers and mobiles have been sold at Wesley Acres is evidence of the below-market rental rates.) With the increase in its costs, including the increase in rent under the Head Lease, WATPI is compelled to increase lot rates going forward. Recognizing that this is a significant increase, WATPI adopted a stepped increase in the lot leases from 2021 to 2024. Fortunately, all lot lease holders have benefited in the delay in not having to pay higher rates until now.
The WATPI Board has invested a great deal of time, a great deal of prayer and a great deal of creative energy in developing a plan to cushion the impact by spreading the increase over four years. WATPI Board members are lot lease holders too and will be impacted along with everyone else.
16. Okay, that explains why the increase is there and how it was developed but it seems with the new head lease the WAI Board will have a significant amount of extra money to deal with. What are they going to do with it? And if they did not need it before, why do they need it now?
As alluded to above, many of the buildings on the property are in desperate need of repairs and updates to make the ministry more effective. Other improvements on the grounds are up for discussion. Finally, as a charity, WAI must use its income for its charitable purposes which are ministry.
17. So, does all this mean that WAI no longer needs donations to cover ministry?
WAI receives money from two revenue streams. One is the head lease from WATPI. The other is tax receipts for donations directly to ministry. Because you pay your lot lease does not mean it is unnecessary to donate to the ministry. Your lot lease is for the physical grounds and services you receive. Your donation is to further God’s kingdom. Ministry includes kids camps, BLAST, Youth and adult programming.
18. Can people from the park suggest how the additional $ be spent?
The WAI Board decides how WAI revenues are spent and the WATPI Board decides how WATPI revenues are spent. The members of WAI appoint the WAI Board and it appoints the WATPI Board.
19. There is concern that the new lot increases will make Wesley Acres unaffordable for Young Families and Seniors on a fixed income.
Wesley Acres does permit lot lease holders renting their trailer here. There is a process to be followed. If you want more information, please contact the office. This would enable those who are challenged to afford their lot lease the opportunity to maintain and participate in the Wesley Acres community.
This is a concern that has been verbalized since Wesley Acres started creating a trailer park. Many of us, fell in love with being here and made significant sacrifices to have what we have and what we enjoy today.
20. Is it possible to pay my lease as monthly payments over 3 months, 6 months or 12 months?
Yes, we have always had a payment plan, but we do like to have the lot paid in full by December 31 each year. A payment plan is setup by providing the office with credit card or bank account and payments are setup on either the 15th or 30th of each month. In a 12-month plan, any additional charges, like spider spray or winterizing are applied as part of the January balance.
21. Is it possible to use a donation to cover a portion of the lease? We do have the unique opportunity with the charity involved to get a tax benefit for ourselves while also supporting a ministry we all love so much.
No, that is absolutely off-side with CRA as it would be deemed that the lot lease holder has derived a direct benefit – as a lot lease has been granted and a charitable tax receipt has been issued for some portion of the balance. We would hope and pray that donations will still come from those who enjoy the programming offered and as the Lord blesses.
22. I see on the Facebook page that it has been stated that our lot lease rates have increased 143%.
Here are the facts:
Mobiles face the highest increase in base rates over the next 4 years – 111% for a 5500 sq ft lot. There are only 28 mobile homes and a portion of those mobile homes are subject to RTA guidelines, and many have voluntarily opted to participate in the increase.
Waterview lot rate increase in the next 4 years – 98% based on a 2500 sq ft lot. There are 64 lots classed as waterview.
There are 187 Interior lots that have an increase over 4 years of 65% based on a 2500 sq. ft lot.
23. There was another reference on Facebook that the increased lot leases would result in a $3 million increase in revenues.
The actual amount on our 2021 proposed Budget is $275,000. As a ‘For Profit’ business, it is not Gross revenue that determines how much money we have available to pay our lease, and operate our business, but rather, Net Income. The bottom line rather than the top line.
24. Can the lot lease holders form an Association?
A Leaseholders Association is usually formed as a group to collectively bring tenant issues to the Landlord. When a Landlord is a corporation, the board is usually comprised of the shareholders or employees of the corporation. WATPI is rather unusual in that it is the Landlord, but its board is comprised entirely of leaseholders. So, by virtue of its composition, the WATPI board represents the interests of leaseholders. But there are other reasons to consider a WATPI Leaseholders Association.
Why form a Leaseholders Association
1. To formally recognize leaseholders as a group.
2. To help build a sense of identity and community within the Park. There is confusion over the relationship between WA’s ministry and the Park. A Leaseholders Association might help build a sense of community.
3. To provide a forum to bring leaseholders together through activities such as organizing social events or service opportunities.
4. To create a forum for more grass-roots engagement and initiative within the Park, as opposed to top-down initiatives from the WATPI board.
5. To create a forum for bringing issues to the attention of the Board.
6. To facilitate nominations from leaseholders for the WATPI board.
Organizing a Leaseholders Association
1. Inform leaseholders of the initiative.
2. Solicit volunteers from amongst the leaseholders to organize the association.
3. Prepare a directory of all leaseholders containing contact information.
4. Provide all leaseholders access to the directory.
5. Provide an online tool for leaseholders to communicate, post messages, organize things. The WA Facebook Buy/Sell could be incorporated into this.