Buying Cottage Property – The Hidden Problems
I knew, by the smoke that so gracefully curl’d
Above the green elms, that a cottage was near;
And I said, “If there’s peace to be found in the world,
A heart that was humble might hope for it here.”
Many Canadians dream of escaping the hustle and bustle of the city in order to spend the lazy summer days at the cottage. If buying a cottage property is on your to-do list then take a minute to read this article first.
Buying a cottage entails a number of potential hidden problems and therefore it is not like buying a house. While it is always a good idea to have a lawyer review an agreement of purchase and sale, it is particularly important when purchasing a cottage. Unfortunately, many people tend to forget that an agreement of purchase and sale is a legally binding contract. Once you sign it you have to live with it, including any less than favourable terms.
The following are issues that may arise in the context of buying a cottage.
The description of the land
Most cottage lots have been created by what is referred to as a metes and bounds description. In other words the boundaries of the property will likely be described by referring to natural landmarks. (e.g., beginning at the mouth of a branch at an ash stump, thence up the creek S 20 poles to 2 beach, thence east 41 poles to a small walnut in Arnett’s line, etc.)
Aside from this type of description not being that clear, there is the real possibility that some of these natural landmarks have either been moved or have disappeared all together. Therefore you may not be getting what you actually thought you were getting.
Access to the land
Another potential problem with cottage property is access, since it will often not be by a municipal road. Access may be over property belonging to one of the neighbours or it may be a shared private road. It is important that the legal description of the land include the access. It should not be assumed that it will automatically be part of the description.
A cottage lot does not always extend to the water’s edge, since traditionally a width of 66 feet of shoreline was generally reserved to the Crown for a shore road allowance. In addition, the bed of the lake is owned by the Crown. If the cottage or other structures are encroaching on the shore road allowance, it may be necessary to buy the land from the government. If the shoreline or bed of the lake has been filled in or altered, it may be necessary to dismantle a structure, restore the shoreline or buy the property.
In recent years, the Ministry of Natural Resources has gotten much stricter about infilling the bed of the lake and it is now very difficult to get permission to fill in.
Although title insurance is often a reasonable substitute for an up to date survey when purchasing a city property, given the inherent boundary problems relating to the use of metes and bounds descriptions and “moving shorelines” it is usually a good idea to obtain an up to date building location survey when purchasing a cottage.
Drinking water is never a sure thing when it comes to a cottage and therefore the appropriate warranties and conditions should be included in the agreement of purchase and sale. In addition, it will be necessary to confirm the rate of flow of water as well as the type of well servicing the cottage.
It is equally important that the agreement include the appropriate warranties and conditions with respect to the septic system. You will want a copy of the installation report showing where it is located, when the system was installed and by who.
A building and zoning search will be required, particularly if the purchaser has visions of building or renovating the property or the existing cottage.
All real estate transactions will include a number of disbursements for searches, land transfer tax, legal fees and registrations. However, disbursements for a cottage property may be higher because additional and more complicated searches may be involved in order to address the issues mentioned above.
Buying a cottage can be a fun, exciting time. However, it can also be fraught with obstacles because of the unique type of land involved. An experienced real estate lawyer will guide you through the process and will free you up to organize weekends at your summer retreat. Stan Landau works in the area of real estate and would be pleased to assist you. 1Share