More lakeside dwellings are sitting on the market compared with past years, and bidding contests have mostly evaporated against a backdrop of higher interest rates and economic uncertainty.flyzone/iStockPhoto / Getty Images
For aspiring buyers in Ontario’s cottage country, the turn to the fall market can bring a change of rhythm.
Sellers, who are often in no rush during the halcyon days of summer, become more focused after Labour Day.
This year, more lakeside dwellings are sitting on the market compared with past years pick and bidding contests have mostly evaporated against a backdrop of higher interest rates and uncertainty about the economic picture.
Buyers have some time to breathe before making a decision. That’s a relief to industry insiders, who know how impulsive and emotional a cottage purchase can be.
Real estate lawyer Mark Weisleder, who has untangled many complications at closing, urges buyers to take a clear-eyed look at any property they are considering.
“It’s such an important purchase for people,” says Mr. Weisleder, a senior partner with RealEstateLawyers.ca LLP, who advises buyers to hire a home inspector with a depth of knowledge about the area.
Local inspectors have experience with the area’s building codes and bylaws, he points out.
Real estate agent Alexis Victor of Royal LePage Signature Realty says taking the time to hire an inspector is even more essential in cottage country than in the city because there are more idiosyncrasies to consider.
An inspection is especially important for older buildings, Ms. Victor says, because they have often been pieced together over the years. A seller’s grandfather might have laid the floor, for example, but neglected to install a proper subfloor.
She’s relieved the mania of the pandemic has calmed down.
“There was only one small period of time during COVID when people weren’t doing home inspections,” she says, adding that this year’s more sedate pace allows buyers to make more rational decisions.
Sales of waterfront properties in July came in 42.9 per cent below the 10-year average for the month, according to the Lakelands Association of Realtors, which covers a wide swath of northern Ontario cottage country.
The median price for waterfront properties in July tumbled 23 per cent from the same month last year to stand at $809,000 for Lakelands, which includes portions of such well-known communities as Muskoka, Haliburton, Georgian Bay Townships and Lake of Bays.
In the luxury market for cottages, Paul Crammond, broker with Chestnut Park Real Estate Ltd., has seen some high-priced properties trade hands on the Muskoka Lakes this summer, but the segment under $3-million is lagging, he says.
Buyers in that cohort are hampered by higher mortgage rates compared with the ultralow rates during the pandemic. In the more rarefied atmosphere above $8-million, buyers tend to buy when they find exactly the location they are looking for.
Sales of waterfront properties in July came in 42.9 per cent below the 10-year average for the month, according to the Lakelands Association of Realtors, which covers a wide swath of northern Ontario cottage country.benedek/iStockPhoto / Getty Images
Mr. Crammond says some sellers, meanwhile, are still hoping for pandemic-era prices.
Mr. Crammond cautions that city dwellers are unaware of many aspects of purchasing a cottage property: Locals can offer advice on short-term rental rules, garbage pickup, navigation on various lakes and the destruction wrought by mice and squirrels.
Mr. Weisleder also warns buyers that they need to understand a quirk known as the shore road allowance.
In the 1800s – when logging was a thriving industry – land surveyors were required to designate a strip of land along the shoreline that would remain the property of the Crown.
Over time, much of that ownership was transferred to local municipalities. In some instances, they continue to own it to this day.
That means that the strip – typically 66 feet wide – between the cottage lot and the lake or river it faces, is technically public land and therefore open to people who want to paddle up to it or snowmobile across it.
In most cases, Mr. Weisleder points out, the municipality is willing to sell the land to the cottager for a reasonable fee.
Cottage buyers have some time to breathe before making a decision.The Globe and Mail
Problems can become thorny when cottagers don’t take the steps to purchase title, then build a boathouse, dock or bunkie on the land they don’t own.
Subsequent buyers assume that an existing structure is grandfathered, but that is not always the case. Mr. Weisleder cautions that “anything to do with water” can be subject to complicated regulations.
The purchaser needs a land survey to determine whether a shore road allowance is in place, who owns it, and whether any important element – like a well or a building – sits on it.
Even when the cottager does own the land right to the water’s edge, hazards still lurk due to the fact that the province typically owns the land under the water, Mr. Weisleder adds.
He recalls one deal that went sideways when a client purchased a property with a boathouse as large as some cottages. The elaborate structure needed some repairs, and that’s when the buyer learned the seller hadn’t taken out the proper permits before construction.
“It can really cause aggravations on closing. We had to hold back money,” Mr. Weisleder says.
Ms. Victor estimates that a shore road allowance can be purchased for around $8,000 or $10,000 in many areas, but she says many cottagers don’t bother because they still have full use of the waterfront and invasions of privacy are rare.
“On Lake Simcoe, regardless of whether you own it or not, you are responsible for the upkeep,” she adds.
In another case, Mr. Weisleder represented an owner who extended an existing cottage towards the lake. The ebb and flow of the water naturally varied over the years and the new construction was sitting on land actually owned by the province.
When Mr. Weisleder contacted the ministry on the client’s behalf, he learned that workers had been taking photographs of the shoreline for 20 years. Their routine monitoring proved that portion of land had previously been under water.
“They’ve got you,” Mr. Weisleder informed the client, explaining there was no way to argue against the photographic evidence.
The province allowed the client’s purchase of the extra land for a fee, he says, which turned out to be the most reasonable option.
“At least he wouldn’t have to tear it down.”
Mr. Weisleder reminds buyers of a cottage with a septic system to make sure that an inspection of that element is part of every deal. In some cases, the systems put in decades ago need to be replaced.
The environmental rules around such systems have become much more stringent over the years, Mr. Weisleder says.
“They’ve got to comply with current standards. It can be a real nightmare for people.”
Ms. Victor adds that cottagers some time install a system that’s the right size for the dwelling at the time – then add on bedrooms over the years. For that reason, she works with inspectors to take measurements and test the workings.
“I’ve dug up more septic lids in extreme conditions than I care to remember,” Ms. Victor says with a laugh.
She says new buyers might assume they can expand or rebuild the cottage but find out they’re limited by the size of the system.
Ms. Victor sold her own family’s small cottage on Lake Simcoe because that stretch of road didn’t have a connection to the sewer system yet. The existing septic tank couldn’t handle a larger dwelling, and it didn’t make sense to upgrade the system when sewer installation was planned for the future.
She purchased a larger cottage instead.
Ms. Victor says insurance companies have become very attentive to septic systems in recent years. In some cases they are denying coverage.
“There are so many things that can go wrong,” she says. “The insurance questionnaires right now are intense.”
Mr. Weisleder says lawyers aim to work out solutions for conundrums and title insurance can also provide some comfort in areas where boundaries can become muddled over the years.
“You can’t buy without title insurance,” he says.