When purchasing a resale cottage or chalet for personal use, there are several items that may not be readily apparent. The following checklist sets out some of the basic legal and other considerations that may affect your purchase:
1. Parties (Who should be the purchaser(s)? In other words, both spouses, an adult child with a life estate to parents, a corporation, a trust.?)
2. Property (What is the best available description, preferably a survey attached AND specific reference to means of access to the property - see item 2 below)
3. Price (Should a mortgage financing be a condition or should the vendor take back the mortgage?)
4. Closing Date (Usually within 60 to 90 days after acceptance of the offer and not a Saturday, Sunday or holiday and preferably Thursday not Friday. Also avoid 15th, 30 and 31st days of the month)
5. Requisition Date (Preferably not less than 45 days after acceptance of the offer, depending on Closing Date)
6. Irrevocable Date (How long should your offer be open for acceptance?)
7. Up to date survey prepared by qualified Ontario Land Surveyor showing all boundaries, existing buildings and other significant features (such as docks, pumphouses, boathouses, field bed, well, tennis courts, etc.). If vendors don't have one, you should budget to obtain one before closing.
2. Access to Property
1. Is the property accessible by a travelled municipally (possibly provincially) owned and maintained road?
2. Is the property accessible by a private right of way?
- who is responsible for the maintenance of the right of way?
- budget for additional title search costs because entire right of way must be searched as well as property
3. Is the property accessible by a forced road (also called trespass or given road)?
- who is responsible for maintenance of the forced road?
- Road Access Act provisions may apply
4. Is there year round or seasonal maintenance?
5. Are there any untravelled/unopened road allowances (including shore road allowances) adjoining or close by the property? These can be opened by the municipality to provide public access.
6. Water access only (e.g. island properties). Note mainland parking and docking requirement. Road Access Act provisions may apply
3. Water Rights
1. Does the property's front line fronts on water or shore road allowance? If property fronts on shore road allowance, the property is NOT a waterfront property
2. Is water lot in front of property?
3. Are the docks and boathouses:
- located on water lot?
- located on shore road allowance? Could be encroachment
- licensed by Province? Licence must be transferred to the purchaser by the vendor
4. Are there any shoreline improvements or land fill along shore? They could be illegal and could be an encroachment
5. Are there any water courses (e.g. creeks, rivers) running through the property?
4. Services Available
2. Water? If other than municipally supplied
- is quality acceptable? (report from a local health unit is required)
- is the quantity sufficient? (well driller's certificate is required)
3. Is there a private sanitation/septic system?
- precise location of tank and field bed (where applicable)
- certificate of approval is required
- use permit is required
4. Is there a telephone? (private or party line)
5. Is there garbage collection?
6. Is there snow plowing?
7. Is there cable television? (doubtful)
8. Is there postal service? (doubtful - regardless of location!)
5. Additional Pitfalls
1. The purchaser must require reasonable access to property before closing for inspections and water and sanitation/septic system testing
2. The purchaser must obtain warranties from the vendor for water, sanitation/septic system, appliances and pumps are working, no urea formaldehyde, outstanding work orders, deficiency notices and active files The purchaser must obtain a list of contents that are included with the property
3. Prepare a complete list, and if appropriate, allocate a portion of the purchase price to them. Provincial sales tax is no longer payable on contents, but HST is payable on the value of any boats included in the transaction
4. Depending on vendor's use, goods and services tax may be payable. Always have GST included in the purchase price
5. The purchaser must insist on condition in his/her favour if want to renovate or improve the property, build a deck or patio. Permits may NOT be readily available.
- seasonal residential (note restriction on services and use)
7. Are there any registered or unregistered easements or rights of way affecting the property? (roads, driveways, paths, skidoo or hiking trails, hydro lines)
8. Restrictions and covenants that run with the land (the standard forms of agreement usually require a purchaser to accept these provided that they are complied with; so you should know what's in the covenant or subdivision agreement before you sign)