Waterfront Cottage Property Concerns

Challenges Securing “Mixed Use” Mortgage Financing

Over 7 or 8 decades properties values went from a few hundred dollars to hundreds of thousands of dollars. So, now it makes a difference! A mortgagee is not going to loan you any money for the cottage when it’s sitting on the 66 foot road allowance (which you don’t own) in front of your property. Fortunately, most of the value is in the lot, so it’s possible that you still might qualify for enough money.

However as time goes by, it appears that many significantly valued buildings and structures sit on the lake, which is Crown lands, the 66 foot road allowance which is owned by the municipality and there is little left for the property that you actually own, except perhaps for the septic system.

The lot might be worth $250,000, the main cottage might be worth $150,000 and associated outbuildings and structures another $25,000. So, where does that leave us? It probably means that you have $175,000 worth of buildings not on your property. They are sitting either in the lake or on the road allowance in front of your property.

Once you know the rules, in order to create and maintain value in your cottage property you will want to ensure that the buildings are on your property, that they comply with the setbacks, and that you purchase the 66′ road allowance. As for the dock and the boathouse, perhaps you can obtain a licence from the Province to permit it to remain.

Quickly to summarize, the lakes are Crown lands. They will be either under the ownership and control of the Federal Crown (the Great Lakes and the St. Lawrence River, or the Provincial Crown in terms of the smaller lakes. The sixty six foot road allowance will be Federal, Provincial or municipal. A few phone calls will provide you with an answer. Generally, developed areas with organized municipalities will have ownership vested in the municipality.

So, waterfront properties are fraught with issues and it’s best to undertake your research before you buy.

Brian Madigan LL.B., Broker

Leave a Reply

Your email address will not be published. Required fields are marked *