Cottage country: Purchasing rural residential properties
The very word “cottage” conjures up images of summer fun: boating, walks in the woods, sitting out on the dock with a cold drink or roasting marshmallows by the bonfire.
These are the things on which you want your clients to focus when they come to you for assistance with the purchase of a cottage property.
To help make that dream come true, you may have to navigate some difficult waters – or at least turn your mind to some potential issues unique to rural property transactions. Did the owner have a legal right to cross over that private roadway or public land on the way in? Is the cottage constructed on an unregistered hydro easement? Is the general public entitled to walk through this “slice of heaven” on a road allowance? Is the owner allowed to occupy the cottage year round? Did the conservation authority give permission for the construction of the cottage, dock and alteration of the shoreline? For that matter, is the ice in that frosty beverage made from water filled with E. coli bacteria?
Rural residential properties present the real estate lawyer with some of the most challenging issues of any area of real estate law, and may surprise lawyers used to dealing with urban properties. The following are some of the issues that merit additional inquiry when dealing with a rural residential property.
Is access to the property via a municipally maintained road, or does the owner have to cross over privately owned or Crown land? If access is obtained by crossing a private roadway or public land, is the access granted pursuant to a registered easement or right of way? If not, prescriptive easements are difficult to prove, and are next to impossible to obtain over Crown land. If the property’s driveway fronts directly onto a former King’s Highway, the Ministry of Transportation may have concerns. A search should be conducted to determine if a permit was obtained for the driveway. Given the price of some cottage properties, lack of a legal right of access can seriously affect their value.
If access is via a municipally maintained road, does the municipality maintain it throughout the entire year? Some rural residential properties are zoned “seasonal,” meaning that the municipality does not maintain the roadways and may not provide emergency services in the wintertime.
While some cottages have a municipal water supply, most do not. If the water is drawn from a well, is it potable? If the water is drawn from a lake or a cistern, no reliable potability certificate can be obtained. Wells supplying multiple properties may be subject to the Ontario Clean Water Act, and easements for pipes from neighbouring wells (if registered) may violate the Ontario Planning Act.
When a septic system is planned, the owner of the land must first apply to the municipality or the Ministry of Natural Resources for approval of the system’s plans. Once completed, an inspector must sign off the septic system. If additions are made to a cottage after the issuance of approval, the once permissible septic system may no longer satisfy regulatory requirements.
Unregistered hydro easements
Many cottage properties are subject to unregistered hydro easements. Lines and poles may cross the property. The easements themselves may be quite wide, permitting the hydro authority to cut and maintain large swaths across the property. Legally, nothing can be constructed on these easements. A search should be conducted with the appropriate hydro authority for any such easements.
Construction on water bed
When constructing a dock or boathouse, there are several authorities in addition to the municipality who should be taken into consideration. Virtually all bodies of water larger than a puddle are considered “navigable waters,” and as such are regulated by the Ministry of Natural Resources. The shoreline itself may be environmentally sensitive and regulated by the regional Conservation Authority.
Many rural residential properties are subject to the jurisdiction of a regional conservation authority. A conservation authority may impose severe restrictions on any construction on or alteration of the land. A letter of inquiry should be sent to the appropriate conservation authority for the area to see if any such restrictions apply.
Shoreline road allowance
Many bodies of water in Ontario are surrounded by a 66-foot shoreline road allowance owned by the Crown. Often, the municipality will have sold this road allowance to the property owner. If not, the public is technically entitled to cross this road allowance, and the owner cannot deny access to the public. This also means that the owner cannot construct anything on the shoreline road allowance
Accretion and diminution
When land is exposed as the result of the fall of the water level (accretion), the exposed land may not become part of the abutting property. If the Crown owns the accreted land, the abutting land owner loses a legal right of access to the water. Conversely, title to portions of land lost as the water rises(diminution) may revert to the Crown.
Cottage properties are predominantly not whole lots on registered plans of subdivision, and have often been subdivided from larger parcels without attention to subdivision legislation such as s. 50 of the Ontario Planning Act. Cottages and accessory buildings may have been constructed without permits or municipal approval. Additional care must be taken when reviewing the history of subdivision and development of a property, with particular emphasis on access and other easements.
Each rural residential property presents its own unique challenges to the real estate practitioner. With proper awareness, you and your client can both relax and enjoy the cottage.