We have a family farming corporation which owns the farming land and a farm-house located on that land.
We would like to own the farm-house personally (to be able to claim principal residence exemption). Thus we need to tranfer the farm-house to ourselves (from the corporation). We cannot sever the land around the house as the land is unseverable (it's already been severed maximum amout of times).
We need this arrangement:
1. Farm-house is owned by us (personally).
2. Farm-land is owned by the corporation (including the land under the house).
3. We make a long-term leasehold agreement with the corporation for the land under the farm-house.
We went to see one lawyer (big Bay Street firm, no experience with farmers). He said the above structure was probably illegal. He thought the ownership of the building (the farm-house) probably cannot be separated from the ownership of the land (on which the building is located) in this maner.
We went to see another lawyer (solo operation, doing a little bit of real estate). He said he could do everything (transfer the building, make leasehold agreement with right of access to the house, etc), no problem.
If we go ahead with the second attorney, how can we be sure the documents he makes would actually be valid in a court of law? Given the opinion of the first lawyer, we are afraid we might end up with a real estate "deed" not worth the paper it's written on. And when we're slapped with huge capital gains 20 years down the road, our second lawyer will be long gone.
Is there anything we can do to clearly establish once and for all that the transaction is legal? For example, can we have a court review the documents the second lawyer prepares and declare that the transaction is legal?
Also if anybody is familiar with law pertaining to incorporated farms, please advise how can the farmer own the farm-house and the farming corporation own the farm-land, if the land is not severable?