Legal issues to consider when buying a cottage

Originally published in REMonline.ca
Jul 16, 2019
By Natalka Falcomer

Maybe it’s the new flight service by Porter Airlines to Muskoka or maybe it’s the smog that’s prompting Torontonians to move from the hustle and bustle of the city to set up a life in cottage country. Or maybe (and more likely) it’s the cost of a home in the city.

Some Torontonians are opting out of the market to find greener (literally) pastures in the rural parts of Ontario. The math makes sense even if you decide to buy in rural Ontario and rent in Toronto. How? Homes, and therefore mortgages, outside of our urban centres are significantly cheaper than the urban core. As an article reported in Toronto Life, if you Airbnb your cottage when you’re caught in the city, you will more than cover your mortgage and your Toronto rent.

There are, however, some caveats and critical legal and practical issues that may affect your decision.

Short-term rentals:
If you plan to put your cottage on Airbnb, be aware of noise regulations and open fire rules and your neighbours, who may not be pleased with short-term renters partying throughout the summer months. Especially if they’re out there to relax. Zoning restrictions, and not just noise by-laws, may also be in store for parts of cottage country. And don’t forget that your insurance will be sky high because you’re not living in the cottage and because you’re renting it out.

Financing:
Some other things to consider: many banks will only permit financing if the cottage has a furnace, a heated water line from the lake during winter months and a foundation in the ground and not on cinder blocks. Also, as further described below, ensure that the roads are maintained all year and that the property has a proper septic system and clean drinking water. If not, your lender may back out at the last minute. One wonders also wonders about the impact of insurance on homes near the water due to the flooding in Muskoka … stay tuned!

Easements:
Easements and rights of way are deceptively complex legal concepts and often the cause of litigation between neighbours. The point of most easements or rights of way is to ensure that adjacent properties are accessible or that views are protected. Sometimes these easements are noted on title, while in other cases they’re granted by legislation or arise out of implication. Often when there’s nothing in writing or on title, neighbours will litigate over whether or not such access rights exist. As such, if you intend on buying a cottage that needs access to its neighbouring property or if you want to protect a view, don’t assume these rights are protected. Confirm if these rights are registered on title. If not, you may be exposing yourself to unhappy neighbours or a lawsuit.

Unregistered hydro easements:
Unregistered hydro easements can be highly problematic because they permit the hydro authorities to cut through your land and prohibit you from building on the hydro easement. Case law and Hydro One’s policy requires homeowners to be financially responsible for the maintenance of wires and poles found on or near their property. To complicate matters further, such hydro easements are not found on title! You must contact the appropriate hydro authority to determine such easements.

Waterfront improvements:
Never operate under the assumption that the existing cottage or dock on a property is in line with bylaw mandates. Take, for example, a dock. The provincial Public Lands Act and federal Fisheries Act will apply if the construction of a dock impacts both the shoreline waters and fish habitat. This means that the construction of a dock may require not only municipal approval, but also federal and provincial approvals and permits. Ensure that these permits are in place before you purchase any oasis.

Property insurance:
Proximity to a fire hall can impact the rate charged for fire insurance. Typically, insurance companies focus on whether the structure is within five miles of a responding fire hall. In certain locales, insurers may not provide coverage, given lack of adequate fire protection. Get this information before an offer goes in.

Seasonal zoning:
While you may want to escape to your cottage year-round, it doesn’t mean that this is an option. Some rural residential properties are zoned “seasonal”, which means roadways are not maintained during the winter. Apart from no access during certain seasons, you may also be on the hook to provide and pay for maintenance. Seasonal zoning means that the municipality may not provide emergency services in the wintertime, which is cause for concern if you have elderly visitors or grandchildren.

Water supply:
If the water supply for the cottage is municipally provided, you’re in luck. Unlike most cottages that are supplied by well water, you don’t have to be concerned with potability. This is because there is no reliable potability certificate for well water, or water drawn from lakes or a cistern.

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. As always, request applicable certificates and obtain warranties from the seller that the water supply is in accordance with all federal, provincial and local regulations.

Septic:
Septic systems require approval by the municipality or the Ministry of Natural Resources. Ask the sellers for such documentation. If you plan to make any additions to the cottage that affect the septic system, you are likely required to get additional approval to satisfy regulatory requirements. If you plan to rebuild and expand the cottage you plan to buy, ensure that such growth is permissible.

 

Natalka Falcomer
Natalka Falcomer is a lawyer and Certified Leasing Officer who has a passion to make the law accessible and affordable. She founded, hosts and coproduced a popular legal call-in show on Rogers TV, Toronto Speaks Legal Advice. She founded Groundworks, a firm specializing in commercial real estate law, and is the EVP of corporate development at Chestnut Park.

The Two Story Boathouse

 

Nathalie Tinti, Barriston LLP
45 Ann Street
Bracebridge ON P1L 2C1
705-645-5211
ntinti@barristonlaw.com

 

 

Who doesn’t love a boathouse? It increases the living space of your cottage and some boathouses are so beautiful that they are actually like a cottage themselves. These larger boathouses are usually two story and include some sort of living space. But are they legal?

 

Chances are, if you have a two story boat house it is located on either municipally owned land (likely an original shore road allowance) or land over which the Ministry of Natural Resources (“MNR”) has jurisdiction (on the water). Generally, this does not become an issue until you wish to remodel or rebuild your boathouse, or sell your property. Most people believe that this remodel or rebuild is not an issue because the boathouse is “grandfathered” into compliance as a legal non-conforming structure, regardless of current building and zoning compliance. To some extent, this is true. However, you may find that there are legal obligations to the municipality as well as MNR as the Crown and/or the municipality may have an interest in the land upon which your boathouse sits.

 

If your boathouse is built on an original shore road allowance (for a discussion on “OSRAs” see previous OSRA article in this magazine or check them out on our webpage at Barriston.com) you may be forced to buy the original shore road allowance. Forced purchase of this land is may not a bad thing. It improves the footprint of your land. Depending on the square footage of shore road allowance being purchased, this addition of land may also allow you to build a larger cottage in the future. Further, compared to the cost of cottage property, this will be the cheapest land you ever purchase in cottage country! The cost per square foot of shore road allowances has not, thankfully, kept up with the ever increasing cost of cottage country property. However, it should be noted that the costs associated with shore road allowance purchases are governed completely by the municipality in which they are located and therefore may change at any time.

 

If you are lucky enough to have a two story boat house with living quarters that is located on the water, you may be required to either the lease the land that it sits on from MNR or you may be permitted to purchase it. As of January 1st, 2006, MNR reinstated the requirement that owners of certain boathouses located on Crown Land, including but not limited to, the beds of most waters in Ontario, must entered into a lease agreement with the Crown and pay rent in order for the boathouse to remain. Alternatively, it may be possible to purchase the land on which the boathouse sits from the Crown.

 

Not all boathouses, however, require purchase or payment of rent. MNR, in its current policy on boathouse ownership and/or rent states that boathouses located on Crown land do not require land use occupational authority or the payment of a fee or rent if the boathouse is a single story boathouse provided it is used strictly for private use or commercial tourism non-revenue producing purposes and is in compliance with the following:
(a) is mutually considered to be a necessary adjunct to the use and enjoyment of the adjoining upland property:
(b) is located directly in front of the owner’s/occupier’s adjoining upland property (or a shoreline road allowance or Crown shoreline reserve abutting the upland property) and do not interfere with a neighbour’s use and enjoyment of their waterfront property;

 

(c) the boathouse has been approved or exempted by the Canadian Coast Guard under the Navigable Waters Protection Act, if applicable;
(d) is in compliance with applicable permitting requirements; and
(e) specific to docks and boathouses, are used only for the storage and docking of boats and related equipment.

If a boathouse does not meet the above criteria, for example, it has a second story, (regardless of its use), contains living accommodation or is located remote from the owner’s privately owned upland property, then occupational authority and the payment of an annual rent is required.

The lease or the purchase of Crown land can be accomplished fairly easily at a reasonable cost. If purchase is an option, the cost of Crown lake bed land is so reasonable, I highly recommend that you purchase it rather than rent it. One never knows when MNR may change its policy relating to these lands and as anyone knows, long term investment of ownership is always preferable to renting.

 

We at Barriston wish you all a very happy cottage season!

 

 

Boathouse Q & A

Nathalie Tinti, Partner Barriston LLP
ntinti@barristonlaw.com
45 Ann Street
Bracebridge, ON P1L 2A1
(705)645-5211

 

two story boathouse

Question: Is my two story boat house legal?

 

Answer: Chances are, if you have a two story boat house it is located on either municipally owned land (likely an original shore road allowance) or land over which the Ministry of Natural Resources has jurisdiction (on the water). Generally, this does not become an issue until you wish to remodel or rebuild your boathouse. Most people believe that this remodel or rebuild is not an issue because the boathouse is “grandfathered” into compliance as a legal non-conforming structure, regardless of current building and zoning compliance. To some extent, this is true. However, when you go and apply for your building permit, you may find a few surprises.

 

If your boathouse is built on an original shore road allowance (“OSRA”), which is a road that lies between your land and the water, the municipality is within their legal rights to require you to apply to purchase the OSRA or remove your structure from the land. By virtue of past legislation, municipalities own all roads, whether open, closed or OSRAs, that are located within their municipality.

 

Question: Why would I want to purchase a road?

 

Answer: Purchase of an OSRA has many benefits. It improves the footprint of your land, and more importantly, will allow your boat house to be on property owned by you. Depending on the square footage of OSRA being purchased, this addition of land may also allow you to build a larger cottage in the future. Also, this will be the cheapest land you ever purchase in Muskoka! The cost per square foot of OSRAs has not, thankfully, kept up with the ever increasing cost of waterfront in Muskoka. However, it should be noted that the costs associated with any road allowance purchases are governed completely by the municipality in which they are located and therefore may change at any time.

 

Question: What if my boat house in on the water and not the OSRA?

 

Answer: If you are lucky enough to have a two story boat house with living quarters that is located on the water, not on the OSRA, you are required to either the lease or purchase the land that it sits on from MNR. The lease or the purchase can be accomplished fairly easily at a reasonable cost. Again, as the cost of this land is so reasonable, I highly recommend that you purchase it rather than rent it. One never knows when MNR may change its policy relating to these lands and as anyone knows, long term investment of ownership is always preferable to renting!

 

Happy cottaging!