The purchase of rural property, whether a cottage or a farm, can represent special challenges and problems for the buyer. There are various special enquiries and searched to be made respecting such rural property.
1. Public Roads and Road Allowances
Problems relating to access to and from the property are of primary concern to the buyer, and can significantly impact the land's value. First, the buyer should review the available survey information and should consider additional survey and/or title insurance if warranted. Second, the issues relating to roads should be dealt with in the agreement by way of a condition, or a representation and warranty that there is a legal access to the property. The usual questions which may arise relate to: (1) whether there is a road of any kind to the property; (2) whether it is a public or a private road; (3) whether it is opened or unopened; and (4) who has the obligation to maintain and repair the road. The buyer also should discuss with the seller whether he intends to use the property year-around, or just for seasonal use, and must then make the appropriate enquiries to determine whether the road is maintained during those times.
Notably, after January 1, 2003, land may only become a highway by virtue of a municipality passing a by-law, and not by the activities of the municipality or any other person in relation to the land, including the spending of public money. In some instances a highway may have been used by the public, but has never been opened by the municipality. Such a road would not constitute a public highway, although there would be a public right of passage. Improvement to unopened roads may not be made without the consent of the municipality. A search at the Land Registry Office and the appropriate municipal office should determine whether the road has been opened. The fact that a road has been dedicated a public highway does not automatically give rise to an obligation on the municipality to maintain it. A municipality has no obligation to maintain the surface of a highway unless it has assumed the jurisdiction and responsibility to do so. Moreover, it is also not uncommon to find roads in rural or cottage areas which appear to be maintained by the municipality but may not be public roads at all. In both of these instances, an enquiry to the municipality or Ministry of natural Resources can ascertain the status of the road.
2. Private roads
Although the right to use a private road generally resides in the owner of the land on which the road is situate, the Road Access Act broadens this right in connection with "access roads". Section 1 of the Act defines "access road" to mean "a road on land not owned by a municipality and not dedicated and accepted as, or otherwise deemed at law to be, a public highway, that serves as a motor vehicle access route to one or more parcels of land." Section 2 of the Act prohibits anyone from blocking an access road to the point of obstructing road access to one or more parcels of land or to boat docking facilities, unless: (1) the affected owners have agreed in writing; (2) a road closure order has been applied for an issued by a judge; (3) the closure is temporary. Finally, there are also provisions in s.3 of the Act relating to the conditions that attach to obtaining a court-ordered closure of a road.
Where the search discloses that the road is neither a public road nor an access road to which the Road Access Act applies, the owner of the road must be determined. The buyer should review all prior deeds in the chain of title for the property, to determine if the subject property has the benefit of a registered right-or-way. The description of the right-or-way should also be reviewed for adequacy and registrability, and should be compared to the travelled road and any survey to ensure that the right-or-way as described in the deed is in the same location as on the ground. Buyers should take care to note that over the passage of time, the use of rights-of-way often extend to properties that were not part of the original grant. The buyer should also ascertain whether there are any limitations on how or when the right-of-way can be used. Also, if the land is lakefront property, the description should include reference to the 66-foot reserve to the Crown for the road allowance along the lake shore. Also, if right-of-way or easement has been registered on title, it may be possible to establish a "prescriptive easement" for lands located in the registry system pursuant to s. 31 of the Real Property Limitations Act if there has been more than 20 years of uninterrupted, open, and continuous use, with the knowledge of, but without the permission of the owner of the servient tenement. Statutory declarations from prior owners of the property for the 20-year period should be obtained.
4. Access By Water
Many Ontario cottage properties can only be reached by water. In such cases, the buyer make enquiries respecting the availability of parking and boat-docking facilities, and will want to include either a condition, or else a representation and warranty, covering such facilities in the agreement. Access by water will also be governed by municipal by-law in many cases. Some allow for the limited development of waterfront landings abutting the highway; others permit boat launching from an original road allowance that leads to the water. Some municipalities prohibit entirely the use of public docks as access facilities for private properties. The potential buyer will want to ask the seller about these matters, and will want to amend the agreement accordingly so that they are addressed in a satisfactory manner.
II. Waterfront Property
1. Shore Road Allowances
If the property abuts a lake or navigable river, then the buyer becomes a riparian owner with certain additional rights and privileges. Whether a body of water is "navigable" can be determined in common law or by statute (Navigable Waters Protection Act), which includes a canal and any other body of water that was created or altered as a result of the construction of any work. However, the buyer should obtain assurances that the property boundaries do in fact reach to the water's edge or beyond (especially since he or she will likely be paying a higher purchase price based on water frontage). Historically, shoreline allowances were laid out by Crown surveyors along lakeshores and navigable rivers, and measure 66 feet in perpendicular width from the natural boundary, usually the high water mark. The existence of shore road allowances or Crown reserves can come as a surprise to the potential buyer, and can give rise to unforeseen issues. For example, if it is presumed that a shore road allowance exists on the seller's property, but search shows that one was not reserved to the Crown, the seller may be retaining an interest in the abutting land in contravention of the Planning Act. As such, the buyer should ensure that the agreement sets out the buyer's entitlement to this water frontage without interference from a shore road allowance or any other right-of-way or access rights by any other parties. If applicable, an updated building location survey or plan of subdivision will also reveal the existence of an unopened shore road allowance or Crown reserve.
2. Shoreline Boundaries
Generally speaking, because some water boundaries relate to specific natural topographic features, the nature and extent of the boundary will depend on the original description of the property as set out in the original Crown patent. However, the boundary may change gradually due to the natural process of erosion and accretion, both of which involve the slow gradual and natural change over the course of time. If the original Crown patent has defined the property boundaries with reference to the "water's edge" or the high-water mark, then the owner of land bounded by water is presumed by law to be entitled to any extension arising by accretion. However, if the property boundaries are not defined in this manner, they will not vary with the change in the water level and will be unaffected by accretion and erosion. As the result, the buyer of waterfront property should always verify the Crown patent for indications of shorefront land in favour of the Crown. It should be noted that in cases where there is an issue as to the re-tracking and locating of a boundary, and where evidence is used to establish such a boundary, physical measurements are usually given the least evidentiary weight, while monuments in their undisturbed locations are given more weight.
Because the bed of the lake is reserved to the Crown, any deliberate in-filling of land has the legal effect of suspending the legal rights that would arise through normal accretion, and instead constitutes an encroachment on that land, and one which does not give rise to ownership. Both buyers and sellers should review the agreement, as well as an updated survey, to determine whether any infilling has created problems, e.g. part of the cottage or boathouse is actually on filled land rather than deeded land. If so, it may be possible to purchase the in-filled land, subject to the approval of the Ontario Ministry of Natural Resources.
3. Water Potability and Flow
The state of the water on the property can be a significant concern, and a potential buyer should confirm the relevant information with the seller well in advance of closing. Specifically, the buyer should obtain assurance that his water supply and treatment system are adequate both as to potability and volume. This will be mandatory if the buyer is obtaining an institutional mortgage, because lenders will refuse to advance funds unless the proper confirmation has been made. As such, the source of the property's household water supply must be determined. Water may be available from lakes or streams or from ground water, if the buyer is fortunate, it may be available from the township water supply.
First of all, the buyer should include conditions (or alternatively, have the seller make warranties) in the agreement of purchase and sale to the effect that there will be an adequate supply of potable water to the dwelling located on the property. The seller must provide a well driller's certificate as to the adequate flow of water as well as satisfactory test results on the potability of the water from the Department of Public Health. In situations where the water is drawn from a lake or cistern, no reliable potability certificate will be available. Water drawn from lakes and streams must be treated in order to be safe for consumption; it is more likely to be contaminated than water from ground sources. There are numerous treatment systems available which remove bacteria from the water supply, but the water should be tested bacterial content by the Public Health Unit.
Ground water is usually obtained from a well, which can either be dug, drilled or bored. In all cases it should have a water-tight concrete casting to prevent flooding. A drilled well is usually installed by a well driller who is licensed by the Ontario Ministry of the Environment, and who reports to the Ministry and provide a well driller's certificate upon completion of the work. If available, the buyer should ask the seller for a copy of this certificate on closing. Alternatively, the same information can be obtained from the local Ministry of Environment office. Also, private owners may have installed their own wells, in which case the Ministry will likely have no record of it.
A dug well is shallow and therefore more likely to become contaminated, raising significant potential health concerns. it is often advisable to have a treatment system in place for the well water to protect against bacteria and pollution. There is no formalized or mandatory government inspection of wells, so the owner must check the water supply on a regular basis. Water samples can be submitted to the local Public Health Unit for testing.
There are several additional items that should be confirmed by the lawyer as part of any potential purchase and sale. Chemical contamination may occur if the well is located near a road, or near a stream that drains from a road. In these cases testing is usually arranged through a private laboratory. Wells which supply multiple properties may be subject to the provincial Clean Water Act and to easements for pipes which emanate from neighbouring, registered wells. The Ministry of the Environment also keeps owner-submitted well records, containing information on the location and construction of existing wells, which can be searched.
4. Septic and Sewage Systems
Of equal concern to a buyer is the system for sanitary disposal of sewage from the property, which is usually a private sewage system. As of April 6, 1998, these sewage systems are regulated by the Building Code Act and by the Building Code enacted under it. Section 1 of the Act gives definition of "building" and its sewage system. Section 10 of the Act prohibits anyone from operating or marinating a sewage system except in accordance with the Act and the Building Code. Section 15 of the Act deems "unsafe" any sewage system not maintained and operated in accordance with this legislation. Section 15 also prohibits the construction, installation, repair servicing or employing of sewage systems except by qualified persons who meet the requirements of the Building Code.
The agreement of purchase and sale should contain representations and warranties to the effect that the septic system is in good working order and complies with all applicable laws, and that any applicable certificates have been obtained and will be provided on closing. the seller should be obliged to provide the buyer with the following: (1) a warranty attesting to the age of the sewage system; (2) copies of any relevant documentation in his or her possession or control; and (3) information on when septic tank was last pumped, and by whom.
The buyer should also conduct a search with the local office of the Ministry of Environment or the local health unit to obtain a copy of an installation report showing when the septic system was installed, its location specifics, and whether there are any work orders or violation notices on file. However, if a cottage is older, it may have been constructed before modern legal requirements were in effect, in which case there may be no records and/or the septic system may no longer comply with current requirements. Also, if possible, there should be a provision in the purchase and sale agreement allowing the buyer to conduct an independent inspection of the septic and sewage systems. This will usually involve a visual inspection around the boundaries of the system, to look for pools of liquid, damaged vegetation, evidence of leakage and damages, or evidence that the septic bed may be partially located on a privately-owned road allowance.