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Some important tips for rural and cottage property buyers

There’s no doubt about it: the market for recreational properties continues to boom even though there are some signs of a slight slowdown. In the past year, there has been a sharp and palpable rise in activity.

Maybe it’s simply tied to the overall uptick in the housing market. Or maybe it’s tied to the impact of COVID-19, which has prompted some people to return to a simpler lifestyle and to focus on things that really matter. They are looking for quality time with family, cleaner air quality, less crime, cheaper housing costs and less stress.

Certainly the impact of COVID-19 on the blue-collar labourer, as well as on the white-collar employee, has contributed to the surge of people leaving major urban areas in Ontario, to out-of-town properties as well as moving out of the province.

They need take extra care to make sure there are no hidden surprises once the deal is done. Here are a few key points.

Key questions to ask

Does the cottage or rural property have garbage pick-up, or does the property owner have to take garbage to the dump? Are the roads maintained by the municipality or are they private roads that must be maintained by the property owners who use them? Inquire whether the roads are maintained by the municipality all year round, and if not, who is responsible for clearing the snow in the winter. If you have school-age children, what type of educational facilities are available? What type of health and medical services and facilities are nearby? How close is a grocery store?

Check what type of structure can be built, or what can be added to an existing structure. Can the property be used year-round, or is only seasonal use permitted?

Waterfront woes

Lakefront cottages and rural properties come with extra concerns and potential pitfalls.

The main one arises from the fact that in Ontario, virtually all of the cottage and rural properties that front on a navigable river or lake are subject to a Crown reserve of the waterfront, known as a “shore road allowance”. It consists of a 66-foot-deep strip that hugs the shoreline. It is a deeded parcel that remains the property of the municipal, provincial or federal government (as the case may be). Shore road allowances were first established in the 1800s to ensure that the Ontario public would always have access to the province’s beaches and waterfront, whether for transportation or recreational purposes.

In the years since shore road allowances were first established, many have subsequently been sold by the government to the property owner whose property is immediately adjacent to the road allowance. However, this is not always the case, so it’s important for those who intend to purchase a waterfront property to get clarification as to the true extent of what they are buying. You must check the exact area size of the property and its dimensions.

Boundary blues

Next, there is the question of boundaries. Returning to those properties with a shore road allowance, buyers must become familiar with the placement of existing structures on the property itself – items such as the dock, boathouse or even portions of the cottage itself.

To the untrained eye, these structures may appear to be squarely situated on the purchased land, but in reality they may be illegally encroaching on what is still a publicly owned shore road allowance. These factors and other issues must also be considered by buyers of rural properties (or any property that is adjacent to a body of water).

Even if the property is landlocked, the intended owner may not be “out of the water” in terms having issues to investigate. Rural properties in general and cottage properties in particular in some cases have problematic lot lines, irregular boundaries, unexpected easements and disputes over access roads. For example, there are many situations where access to one owner’s cottage is only available by legally traversing through the property of the neighbour, through an access road. Some properties may be landlocked, which results in the owner only having access by boat. Ideally, both neighbours in this scenario have accurate information on the extent of their rights.

It’s all about the survey

With the potential issues around lot lines, shore road allowances and access, it’s vital for buyers of rural properties to understand exactly what they are getting – especially those who have plans to build, extend and/or renovate the property in the future.

In those situations the importance of an up-to-date survey cannot be minimized.

With the help of a lawyer who can explain what it reveals, the survey will show potential buyers the true location of the property boundaries, as well as any waterfront shore allowances where applicable. It will also show any existing easements and the location of private or public access road allowances.

Having an updated survey will allow the buyer to fully understand the true limits of the property – and get clarity on any limitations around what can and cannot be done on it in the future. It will also be a catalyst for the lawyer to identify any potential issues that are revealed and to discuss available solutions with the potential buyer in advance.

Utilities and permits

In this unusual year, there are other issues to be considered, such as hydro supply to the property, and whether the property is connected to the municipal water and sewage systems. If the property is serviced by lake or well water, you must check both for the water quality and the water flow. Is it sufficient for dishwashing, washing clothes and taking a shower or bath? If sewage disposal is based on a septic tank, is the tank in good working condition? Has it been cleaned out recently? If not, that should be a condition of an offer. Was the septic system installed with the necessary permits? Has the septic system been recently installed?

If the property is a cottage, or other rural property, was it built with the proper permits? Are there any outstanding permits or deficiency outstanding work orders? These searches must be conducted by the lawyer acting on the buyer’s behalf.

All of this research and investigation will prevent surprises later on, not to mention a costly trip to court to sort out any post-closing disputes that may arise with the seller or municipality.

The takeaway

Traditionally, a rural setting is a spot where people go to leave their troubles behind. But for those thinking of buying a rural or recreational property, the initial approach should be anything but laid-back and casual. Doing your research, and asking questions now, can avoid a lot of stress and disappointment in the future. Do not rush into a purchase spontaneously.