Common Clauses when Buying a Cottage?
Below are some common clauses inserted in the sale agreement when buying a cottage, which you may not see when buying a house in Toronto. These clauses are normally found in schedule A of the sale agreement.
Condition Docks/Boathouses - Approval at Buyer's Expense
This Offer is conditional upon the Buyer determining, at the Buyer's own expense, that the [boathouse, dock, pier, etc.], used in conjunction with the property, and passing to the Buyer on completion, [has/have] received all necessary approvals and permits from the Ministry of Natural Resources, the Federal Government under the Navigable Waters Protection Act, Canada, from [insert appropriate conservation or canal authority as required], and from all other relevant authorities. Unless the Buyer gives notice in writing delivered to the Seller personally or in accordance with any other provisions for the delivery of notice in this Agreement of Purchase and Sale or any Schedule thereto not later than p.m. on , that this condition has been fulfilled, this Offer shall become null and void and the deposit shall be returned to the Buyer in full without deduction. This condition is included for the benefit of the Buyer and may be waived at the Buyer's sole option by notice in writing to the Seller as aforesaid within the time period stated herein.
Condition Docks/Boathouses - Approval at Seller Warrants
The Seller represents and warrants to the best of his knowledge and belief that the [boathouse, dock, pier, etc.], used in conjunction with the property, and passing to the Buyer on completion, [has/have] received all necessary approvals and permits from the Ministry of Natural Resources, the Federal Government under the Navigable Waters Protection Act, Canada, from [insert appropriate conservation or canal authority as required], and from all other relevant authorities. The Parties agree that these representations and warranties shall survive and not merge on completion of this transaction, but apply only to those circumstances existing at completion of this transaction.
Condition Insurance
This offer is conditional on the Buyer arranging insurance for the property satisfactory to the Buyer in the Buyer's sole and absolute discretion. Unless the Buyer gives notice in writing delivered to the Seller personally or in accordance with any other provisions for the delivery of notice in this Agreement of Purchase and Sale or any Schedule thereto not later than ____ p.m. on , that this condition is fulfilled, this offer shall be null and void and the deposit shall be returned to the Buyer in full without deduction. The Seller agrees to co-operate in providing access to the property, if necessary, for any inspection of the property required for the fulfillment of this condition. This condition is included for the benefit of the Buyer and may be waived at the Buyer's sole option by notice in writing to the Seller as aforesaid within the time period stated herein.
Sewer/Water
Approval Warranty
The Seller represents and warrants, to the best of the Seller's knowledge and belief, that:
(1) all sewage systems serving the property are wholly within the setback requirements of the said property, and have received all required Certificates of Installation and Approval pursuant to the Environmental Protection Act;
(2) all sewage systems serving the property have been constructed in accordance with the said Certificates of Installation and Approval;
(3) all sewage systems serving the property have received all required Use permits under the said Act or any other legislation; and further, all sewage systems serving the property have been maintained in good working order during the Seller's occupancy and will be in good working order on closing. Further, the Seller agrees to provide any and all documentation relating to the sewage system, within the Seller's possession, or which may be made available to the Seller by the appropriate authorities, and given to the Buyer prior to the last date set for examining title. The Parties agree that these representations and warranties shall survive and not merge on completion of this transaction, but apply only to the state of the property existing at the completion of this transaction.
Condition Warranty
The Seller represents and warrants, to the best of the Seller's knowledge and belief, that, during the Seller's occupancy of the building, the sewage system has been and will be in good working order on closing. The Parties agree that this representation and warranty shall survive and not merge on completion of this transaction, but apply only to the state of the property existing at completion of this transaction.
Water Warranty
The Seller represents and warrants, to the best of the Seller's knowledge and belief, that, during the Seller's occupancy of the property, the pump and all related equipment serving the said property have performed adequately, and will be in good working order on closing and are currently capable of delivering not less than ____ gallons per minute (GPM) on the continuous basis of not less than ____ hours. The Parties agree that this representation and warranty shall survive and not merge on completion of this transaction, but apply only to the state of the property at completion of this transaction.
Well Water
This Offer is conditional upon the Buyer determining, at the Buyer's own expense, that the Buyer can obtain a Bacteriological Analysis of Drinking Water from the authority having jurisdiction indicating that there is no significant evidence of bacterial contamination.
Shore Road Allowances
This Offer is conditional upon the Buyer determining at the Buyer's own expense that: (1) the property being purchased has at least [insert appropriate frontage dimension], metres/feet], of frontage on [name of lake or river]; (2) no road allowance, open or unopened, or other public or private lands exist which will interfere with the right of the Buyer to use and enjoy the said water frontage; and (3) that there are no unregistered rights or easements. Unless the Buyer gives notice in writing delivered to the Seller personally or in accordance with any other provisions for the delivery of notice in this Agreement of Purchase and Sale or any Schedule thereto not later than ________ p.m. on , that these conditions have been fulfilled, this offer shall become null and void and the deposit shall be returned to the Buyer in full without deduction. These conditions are included for the benefit of the Buyer and may be waived at the Buyer's sole option by notice in writing to the Seller as aforesaid within the time period stated herein.
Some other points/clauses to consider when buying or selling a cottage
Proof or warranty that road access to the cottage was by way of a public roadway or by means of registered right of way.
Survey showing exactly what was being purchased – in suburbia in Toronto properties are mostly rectangular in nature, but cottage properties are around a lake which does not have a very angular shape, plus the properties are often elongated with the narrow portion along the waterfront. Land is not scarce in Muskoka, but waterfront is.
Buyers will typically want more warranties and documentation in cottage country then when purchasing a house in Toronto, such as; water quality and quantity, road access, septic permits, building permits, surveys, docks, boathouses and shore road allowances.
If purchasing a cottage in winter, it is important for the purchaser to ensure that the seller will point out, and that the home inspector will have access to, the septic tank. Also if the cottage is only a three season cottage, the home inspector will not be able to property inspect the Septic Tank as the water will be switched off. Therefor the buyer may have to rely on a warranty from the seller that the septic tank shall be working in spring and also that the quality of the water is fit for drinking.
