The Ontario Cottage Buyers Guide

Buying a cottage takes more homework than buying a house. The water, the road, the septic system and the township rules all matter as much as the building. This guide sets out the purchase in seven steps, in the order that saves the most time and money.

Step 1: Decide how you will use it and how far you will drive

Start with use, not listings. Write down honest answers to a few points.

• Seasons. Summer only, or year-round. This decides if you need a true four-season cottage on a plowed road.
• People. Young children, teenagers, grandparents, guests. This shapes the shoreline you want and the bedrooms you need.
• Activities. Swimming, fishing, paddling, water skiing, snowmobiling. Not every lake suits every one.
• Rental. If you need rental income, the township's rules come first.
• Drive time. Decide on a limit and test it on a Friday afternoon in summer. A cottage that is too far away gets used less every year.

From the Greater Toronto Area, most buyers look at the Kawartha Lakes, Muskoka, Haliburton, Georgian Bay and Simcoe County first. You can browse by region to compare.

Step 2: Set the budget and get pre-approved

Work out two numbers: what you can buy, and what you can carry each month.

For the purchase, lenders sort cottages into two groups, commonly called Type A and Type B. A year-round cottage with a permanent foundation, permanent heat, drinkable water and year-round road access is treated much like a house. A seasonal cottage needs a larger down payment and has fewer lenders. Many buyers use equity from their primary home instead. See how to finance a cottage in Ontario.

For carrying costs, add property tax, insurance, heat and hydro, road fees, plowing, septic pump-outs, dock work and repairs. Then add closing costs, including Ontario land transfer tax.

Get pre-approved before you tour, and tell the mortgage broker it is for a cottage. A pre-approval for a city house does not tell you what a lender will do with a seasonal road.

Step 3: Pick the lake and shoreline

Choose the lake before the cottage. A building can be changed. The water cannot.

• Lake size and character. Big and busy, or small and quiet. Check for any boating restrictions.
• Shoreline. Sand, rock, weedy or wetland, and the depth off the dock.
• Exposure. West and south for afternoon sun, east for mornings.
• Water levels. On dam-controlled lakes, ask how far the level drops by late summer.
• Water quality. Read the lake association's reports.
• Frontage and privacy. Compare frontage in feet between listings.

Waterfront 101 covers each of these, along with shore road allowances and dock permits.

Step 4: Tour with a checklist

Showings are often a long drive, so make each one count.

At the water:

• Walk into the lake. Check the bottom and the depth at the end of the dock.
• Look at the dock, cribs and boathouse for rot, shifting or ice damage.
• Note the slope from the cottage to the water and how many stairs there are.

Outside:

• Find the septic tank and bed. Look for wet ground or anything built on top.
• Find the well head, or the lake intake and pump.
• Look at what holds the cottage up: basement, piers or blocks.
• Check the roof, chimney and any trees hanging over the building.
• Note the last stretch of road and who would plow it.

Inside:

• Check the heat source, the electrical panel and the water treatment equipment.
• Look for stains on ceilings, sloping floors and musty smells.
• Count real bedrooms and compare them to the listing.
• Test cell service and ask about internet.

Ask what is included. Docks, boats, furniture and tools are often part of a cottage sale, and they should be listed in the offer.

Step 5: Write the offer with the right conditions

Conditions give you time to check the property and a way out if something is wrong. A cottage offer usually has more of them than a city offer. The common ones are:

• Financing. The lender has to approve the property, not just you.
• Home inspection. Use an inspector with cottage experience.
• Septic inspection. With a pump-out, and with the use permit provided by the seller.
• Water potability. A bacteria test, and a flow test for wells.
• Insurance. Confirm you can get a policy at an acceptable cost.
• WETT inspection. For any wood stove or fireplace. Your insurer will likely ask for it.
• Survey and shore road allowance status. The seller provides an existing survey, and your lawyer confirms if the allowance along the water is owned.
• Lawyer review. Often used for road access, title and any rental licence.

In a competing-offer situation you may be pressed to drop conditions. On a waterfront property with private services, that is a large risk. If you must shorten the list, do the inspections before you offer, not never.

A cottage specialist will know which conditions are standard on that lake and how long each takes to complete in that township.

Step 6: Due diligence

Once the offer is accepted, the clock starts. Book everything on the first day.

1. Send the accepted offer to your lender and lawyer.
2. Book the home, septic and WETT inspections. Septic pumpers get busy in summer and fall.
3. Pick up a water sample bottle from the public health unit and submit the sample early in the week.
4. Call the township about zoning, open permits, the septic file and short-term rental rules.
5. Get an insurance quote in writing.
6. Have your lawyer review the survey, the right of way, the shore road allowance and any road association agreement.
7. Ask for dock and boathouse permits, and for a year of utility and tax bills.

If a problem turns up, you have three choices: ask the seller to fix it, renegotiate the price, or walk away within the condition period. Our guide to septic, wells and water explains what to look for.

Step 7: Close and open up

Before closing, your lawyer will search title, arrange title insurance and tell you how much money to bring. That amount includes the down payment, land transfer tax, legal fees and adjustments for items the seller prepaid, such as property tax or fuel in the tank.

Arrange insurance to start on the closing date. Set up hydro, propane and internet accounts in your name. Do a final walk-through if your agreement allows one, and check that the items included in the sale are still there.

On your first weekend:

• Change the locks and test the smoke and carbon monoxide alarms.
• Learn where the water shut-off, the electrical panel and the septic tank lids are.
• Ask the seller or a neighbour to walk you through opening and closing the water system.
• Join the lake association and the road association.
• Meet the neighbours. They know the lake, the road and the best local trades.

When you are ready to start, get in touch and we will connect you with a cottage specialist for the area you have in mind.

This guide is general information, not legal, tax or financial advice.