As the summer approaches, many Ontario residents will consider purchasing a cottage. While purchasing a second home can be an exciting experience, there are many unique issues that one should take into consideration before signing on the dotted line.
First, find out whether there is an up-to-date survey of the property. A survey is an important document that reveals the dimensions of the lot, the location of structures and easements on the lot, as well as any encroachments onto the property or onto the adjoining properties. If the purchase is being financed with a mortgage, the lender will often require that the purchaser obtain a new survey. This can cost approximately $750. However, purchasing a title insurance policy may eliminate this expense.
Second, find out if there is access to the cottage. Unfortunately, most purchasers fail to realize that the ability to use and enjoy a cottage property is entirely dependant on access. This is because if access to the cottage is blocked, the cottage is of little or no value to the owner. More often than not, access to the cottage property will not be by way of a municipal road. It may be by way of a private road that is used by other cottage owners and is also maintained by these cottage owners. In this case, it could be argued that a cottage owner is trespassing on private roads in order to access his or her cottage. This is important because purchasers are typically unwilling to purchase a cottage if access to the property is not guaranteed. In many cases a title insurance company will assume the risk that there may be no access to the cottage in return for a modest one-time premium.
The third matter to consider may also be the most important. As many cottages are not connected to municipal services, water is usually obtained from a well. Before purchasing a cottage, it is crucial for the purchaser to conduct a potability test at the local public health department to confirm that the well water is safe for human consumption. Many purchasers fail to take this precaution, only to realize later that the drinking water is contaminated and therefore unsafe. A safety issue like this cannot be ignored. In addition to confirming that the water is safe, the purchaser should confirm that the rate of water flow is sufficient for normal residential use.
Finally, municipalities have the authority to pass zoning by-laws that can place restrictions on how you use your cottage. For example, the zoning by-law may not allow you to build a deck or a boathouse, or may require that you obtain the approval of the municipality before doing so. More importantly, some cottage properties are zoned in such a manner that only seasonal use is permitted. Thus, if you intend to live in your cottage on a year-round basis, you may be prohibited from doing so.
As with any large investment, when purchasing a cottage, it is important to conduct some preliminary investigations to avoid surprises. You can protect yourself by consulting an experienced real estate lawyer.