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gift cottage estate planning

Top Three Things You Need to Consider When Buying a Cottage

Buying or selling a home, cottage, or rental property? Call us! We are pleased to announce that we are expanding our practice areas to better serve our clients. We will now be assisting clients with sales of real property, purchases, and mortgage refinancing. Call us at 613.836.9915 for further details.


gift cottage estate planningThe temperature in Ottawa has steadily risen over the past week and culminated over the weekend in our first heatwave in May in over 100 years.  This steady rise in temperature is matched by a steady rise in residential property sales over the last few years in Ottawa with this spring being no exception.

At this time of year, many of us turn our attention to the dream of cottage ownership. While shopping for the perfect lakeside getaway however, it is important to keep in mind that there are different issues to consider when buying a cottage property versus buying a property in a more urban setting.

Here are our top three things to consider when buying a cottage property:

1.      Shore Road Allowance

In many parts of Ontario, waterfront properties have what is known as a ‘shore road allowance’. This is a 66-foot strip of land along the shore of a lake or river that is actually owned by the municipality. Historically, during the late 19th century, this tract of land was owned by the Crown and used for commercial purposes such as logging and the transportation of goods.

What this means for the cottage property owner is that sometimes a dock, boathouse or possibly even the cottage itself may have been built on the shore road allowance and therefore not legally conforming. When buying waterfront property, it is critical to obtain a proper land survey. This allows the purchaser to determine whether any structures have been built on the shore road allowance. In some instances, title to the road allowance can be purchased from the municipality.

2.     Access/Rights of Way

Access to a cottage property can take different forms. Attention must be paid to how a particular property can be accessed and whether the particular form of access will suit the purchaser’s intentions for the property. For example,

  • a municipal year round access road means that the maintenance (including snow plowing) of the road is taken care of by the local municipality;
  • a private year-round road means that any maintenance of the road is privately funded solely by the users; and,
  • a seasonal road means that the road is not maintained and therefore is only passable at certain times of the year.

Consideration must also be had to whether others have a deeded right of way across the cottage property. Similarly, does the cottage property come with a deeded right of way across a neighbouring cottage property to, for example, reach the waterfront. Both access and rights of way can be deal breakers for some cottage purchasers so it is important to fully understand their effect on the cottage property.

3.     Cottage Trusts

Anyone considering the purchase of a cottage property, especially if the ownership of the cottage property will be shared with others, should consider the benefits of establishing a cottage trust. A trust is a rather abstract legal concept but, basically speaking, it is a relationship between the person who sets up the trust (the ‘settlor’), the people for whose benefit the trust assets are held (the ‘beneficiaries’) and the people who are responsible for managing the trust assets (the ‘trustees’).

Some of the benefits of setting up a cottage trust include:

  • protecting of the trust assets from the creditors of the beneficiaries,
  • saving probate fees on death of an owner;
  • minimizing disputes among those sharing the cottage; and,
  • reducing taxes.

If a cottage trust is being considered, there are many issues that must be canvassed including various taxation issues. It is also critical for the trust to be properly drafted. For these reasons, it is important to consult with professionals who  understand trusts.

Are you considering the purchase of a cottage this year? Are you buying or selling a home or rental property? Call 613.836.9915 or email info@personalawgroup.com to schedule an appointment with me. We will work with you at every step of the way to make your sale or purchase as smooth as possible.

Reproduction of this blog is permitted if the author is credited.  If you have questions or if you would like more information, please call us at 613 836-9915. This blog is not intended to be legal advice but contains general information.  Please consult a lawyer or other professional to determine how the information in this blog might apply to you.

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