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Cottage By The lake

Are You Shore You’re Ready For A Cottage By The Water?


Have you ever dreamed of owning your own little piece of tranquility?  A weekend lakeside retreat, perhaps?

Summers are a time for many Ontario families to head to ‘Cottage Country,’ where they enjoy weekends on the water, evening campfires, and freedom from the stress of the city.  For those who don’t enjoy camping in a tent or trailer, owning a cottage is the choice that allows them to have the best of both worlds: Woods and water outdoors, and a full selection of creature comforts indoors.

From a purely practical point of view, a family cottage can be a great equity-building investment, too.

There are a few things to know about this type of property before jumping into ownership, though.  We have prepared a little crash course for those of you who are considering this kind of property.


Some Types of Cottage Property.

This is not an exhaustive list, but these are the kind of vacation homes we find most often on MLS:

  • Winterized/Year Round Waterfront Cottage:  A true second home, a winterized cottage usually has a proper foundation, sometimes even a full basement, and a heat source for winter use.  It may be situated in a neighbourhood where some residents are year-rounders and others are part-time visitors to the area who use their properties mainly on weekends and holidays.
  • Off-water country home:  A different type of summer retreat, this property will appeal to buyers whose prime goal is to have land to roam and enjoy.  The typical ideal off-water country home will have some acreage, perhaps a wooded area, and be near a beach or water access point even though it isn’t waterfront property.  Though it may be rustic, this is normally a year round dwelling. Some investors have a long-term plan to retire to their year round vacation homes after enjoying them as a weekend getaway for several years.

Lenders view these two types of properties much the same way as primary dwellings. It is possible to get an insured mortgage with only 5% down.

  • Seasonal Cottage:  Typically more affordable than year-round homes, 3-season cottages are open between spring and fall.  A few of these may be accessible by water only, and many are on private roads that do not have winter maintenance. Though not movable (like trailers/mobile homes), they are often built on concrete blocks, pilings, or stilts.  We can find some within campgrounds or parks that provide grounds maintenance and other services, including water supply, for a fee, between May 1 and October 31 every year.  In this category, there are direct and indirect waterfront options. Some private roads are a quick walk to the beach with no water views, despite being zoned for seasonal use only.

Seasonal cottages usually require “Type B” vacation property loans.  Lenders may offer a mortgage on a summer home in this category with as little as 10% down under similar terms to other real estate – subject to acceptance by a mortgage insurer like Genworth. You may find that interest rates are slightly higher, and there might be a cap on the dollar value of the mortgage, regardless of market value.

  • Land Lease:  With prices rising in almost all Canadian real estate markets, this option has become more appealing for many buyers. Mobile homes on leased land (usually within tightly managed parks or resorts) are much more affordable than traditional real estate.  For the purpose of this article, we are only talking about seasonal properties that run from May to October- not the ones where owners live full time in a managed mobile home park.  Many of those communities have restrictions on vacation rentals to protect residents from the atmosphere that a seasonal vacation park requires.

Seasonal cottages or mobile homes on leased land are often on prime land near rivers or lakes, and owners can take advantage of shared amenities like watersports equipment rentals, swimming pools, tennis courts, kids’ clubs, wi-fi, etc.  Grounds are maintained and guests can just show up and enjoy their time.

Many investors who wish to own this type of property treat it as a business, renting the place out for most of the summer season, and maybe using it for a week or two themselves. Land lease fees can be steep, but often include taxes, most utilities, and maintenance costs.

Getting a loan for a home on leased land is more challenging, since you do not own the land.  Many buyers use private funds but, if you require a loan, you may get a chattel mortgage from some lenders.


What You Should Know About Cottage Construction.

Depending on the age of the cottage you are considering, there are some common issues that you may run into when buying a vacation home.

Older structures seldom meet the standards of current building codes. Many recreational properties do not have full foundations, even if they have been upgraded to include insulation and heating for year-round use. You’ll want to pay attention to cracks in the walls and other signs of settling that offer clues that the footings or piers that support the house are inadequate. Repairs like this can be very expensive.

A qualified building inspector should provide a report on structural issues that need attention, as well as any other elements that are problematic: electrical, heating systems (including WETT inspection for wood-burning appliances), destructive pests (termites, carpenter bees/ants, rats/mice, etc), and old septic systems.

Sometimes at waterfront property or on conservation land, sewage waste goes to an underground holding tank instead of a septic system with a leaching bed. This setup can protect the environment from potential contamination.

A holding tank holds all household sewage. It does not leach any liquid away into the ground like a septic system does. The tank has one compartment that can only hold a limited amount of sewage. A vacuum truck is used to pump out the contents, which are then sent to a municipal treatment system. As you can imagine, these tanks need service frequently, so make sure you factor in this cost to your operating budget.

One more thought about an older cottage: If you have plans to renovate, upgrade, or expand your cottage and/or property – make sure you research the zoning thoroughly, find out what permits you will need, and which agencies will need to grant them. You may find that, in addition to the usual municipal offices, you will have to deal with Conservation Authorities, who may have different requirements and charge additional fees.  Rules have likely changed since the home was first built, and there are no guarantees they will allow you to proceed with your planned project until you get the proper approvals.

A Word About Water Supply…

Does the property have a cistern or a well, or both? A cistern is the more straightforward option, the most common type being a buried receptacle that holds trucked-in, treated water for use inside the home. It’s a good idea to inspect the cistern regularly to ensure that it is clean and well-enclosed to prevent anything from getting into the water supply. You’ll want to make sure you know whether your eaves troughs run into the cistern, since that can be a source of impurities. A free municipal water test can tell you whether the supply has any contaminants in it. Proper maintenance of a cistern will keep cottage water supply safe.

A well requires much more attention and more frequent testing. Local health authorities may provide the required testing, but there are also private labs that offer this service.

If you are not familiar with the function and maintenance of wells, and you are considering buying a rural property for use as a vacation home, adding a cistern to the property may be the most convenient solution. Bottled water for drinking and cooking can provide peace of mind that your family will be safe while relaxing at the property.

Access to the Property

It is more common in Cottage Country than in other residential areas to find private roads and rights-of-way over adjacent properties. Rights-of-way may be deeded or un deeded, and may cross over either private or Crown land. It is important that you understand your property. Your lawyer can help you obtain clear, written confirmation that you will have continued access to the property that you own.


Who Owns the Waterfront?

Common sense seems to indicate that the owner of a cottage built on a direct lakefront property is the owner of the land up to the water’s edge.

Laws about this, though, are actually quite complicated – and debates and conflicts more common than you might realize.

To understand the issues, we have to go all the way back to the mid-1800’s. Early land surveyors laid out 66-foot strips of land as commercial road allowances along the shores of rivers and lakes for commercial use by loggers and other transportation companies.

These days, there isn’t a whole lot of logging or commercial activity going on in cottage country. The problem is that, unless the owner purchased the property to the shoreline at some point, that 66-foot span may still be (even if only on paper) Crown Land. This means that the public has rights to access and use that strip to walk along the water, set up a picnic, or even ride ATV’s.

It has surprised some cottage owners to find out that accessory buildings like boathouses and bunkies near their homes are actually not on their property.  The provincial government has a lease program to allow them to keep the building that encroaches on Crown Land by paying rent in some cases.

With the help of a lawyer, the owner of a property that still has an open shoreline access road can apply to purchase this land. Unless there are objections from neighbours or environmental protections in place, many properties will have this option available.

The best way to avoid surprises is to obtain a survey before making a firm offer on a waterfront property, and to have an experienced real estate lawyer search title to ensure that you know all the details of ownership.

Riparian Rights

Owners of waterfront property have riparian rights, that is privileges associated with use of and access to that body of water. Some of these riparian rights are:

  1. Right of access to the water
  2. Right of drainage (of land into the body of water)
  3. Rights relating to the quantity (flow and level) of water
  4. Rights relating to the quality of water
  5. Rights relating to the use of water and
  6. Right of accretion.

The right of accretion entitles an owner to the extension of their land if the water retreats. More often, though, erosion is the concern.

Generally speaking, if you own property that has a water boundary, you have riparian rights, including access to the body of water for recreational uses such as boating, swimming, and fishing.

This does not mean, however, that the owner of a waterfront property owns the water or the lake or river bed.

For more information about riparian rights, click here

Waterfront Improvements

To fully enjoy their water access, many cottagers add docks or boathouses. Some of these require no work permits, such as floating docks or boathouses, or those whose supporting structures have a surface area of less than 15 square meters. (Note that these could still require permission for occupational authority if they are on Crown Land. It’s always best to double check.)

For other types of work along the water’s edge, the Ministry of Natural Resources and the local municipality need to issue permits and approvals. Depending on the location, Transport Canada may even review the matter to ensure that there are no negative impacts on navigation.

Since erosion is a constant threat, many owners of waterfront land build a barrier or break wall of some sort. These are expensive, but often necessary to protect the shoreline from being washed away into the water. Before trying to create one of these structures, even if you plan to hire a contractor, find out whether you need an environmental study in addition to the required permits.


Final Word

A cottage property is a big, exciting investment that can offer enjoyment to multiple generations. If you are interested in creating memories at a summer home by the lake, be sure to do all the research you can so you make the right choice and fully enjoy your own little piece of paradise.

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