For buying that dream cottage, especially if it is by the sea or a lake, is never as simple as it may seem. Cottage properties come with their own unique share of issues and considerations, especially if the property is being bought overseas, says Joey Fitzpatrick, a consultant based in Canada where out of the way cottages are becoming increasingly popular with foreign investors.
‘Many buyers have only ever bought and sold urban or suburban properties. Unpleasant surprises can arise from issues relating to access, sewage, water and other factors, some of which can result in mortgage and insurance problems,’ he points out.
In really rural areas many cottages are not accessible by maintained municipal roads, and some are accessible only by water. The question of access can affect not only mortgage approvals, but also future uses.
‘It’s not just a question of access, but also understanding where your property boundaries are,’ says international property lawyer Kathleen Waters.
‘In many cases with recreational properties, people were informal with things like surveying. So it’s not uncommon to find that part of the cottage structure is not technically on the property.’
Drinking water and wastewater are also big issues with recreational properties. Many rely on well water, but other water sources include lake water or cisterns. ‘For people using this kind of property year-round, or even on a weekly basis, it will be extremely important to have a clean and reliable water source. It is often not as easy as just turning on a tap,’ says Waters. ‘Your lawyer should recommend a potability test and can explain what it does, or does not, cover.’
A key issue in many countries, not just Canada, is the distance between the septic system and the water supply to avoid contaminating the drinking water. ‘It is also important to remember that all septic systems will need to be replaced at some point. They typically last only about 20 years, and often take a lot of upkeep, Waters adds.
Because there are so many legal issues surrounding cottages, especially waterfront properties, potential buyers should speak to legal experts who have experience in this area, Fitzpatrick recommends.
‘Cottages can often be an excellent investment,’ Waters concludes, but warns; ‘some of the problems, especially relating to water and septic issues, can end up costing you even more than the property itself.’
