Your cottage purchase may not include the property’s shoreline

May 26, 2021 | 2021 Toronto Star Property Law Columns

In the early 19th century, the primary mode of transportation to much of the interior of what is now Ontario was by boat, along our lakes and rivers.

When the colonial government provided free land grants to settlers — primarily British immigrants and Loyalists arriving after the American Revolution — they wanted to ensure users of the waterways would have free access to the shores.

As a result, almost all land grants fronting onto navigable lakes and rivers after about 1850 reserved a 66-foot allowance for a public shore. Ownership of those shore road allowances was eventually transferred to local municipalities.

In today’s very hot cottage real estate market, shore road allowances have become very important to owners of waterfront properties. Some municipalities are willing to sell them to cottagers at a range of price points. And some are not for sale.

So it is important for buyers of Ontario lakefront properties to determine, first, whether ownership of the land extends to the water’s edge, and second, whether any cottage, dock or boathouse is sitting on public land. This makes it essential for cottage buyers to have a land survey.

This was a lesson one cottage owner learned the hard way back in 1989.

Mary Holmes bought a cottage on the shore of Lake Huron from Barry Walker for $170,000. It was built in the mid-1930s on a lot with a 50-foot lake frontage and a depth of 140 feet.

Four years later, Holmes arranged for a survey of the land. It was only then she learned that as much as 99 per cent of the cottage had been constructed on the municipal shore road allowance — which she did not own. The cottage had been built by Walker’s father, and there was no indication Walker knew he never owned the land beneath the building.

The local township refused to sell the shore road to her, but offered to lease it for $25 a year. Because of the age and structure of the building, it was not practical to move it back on the lot away from the shore.

Eventually, Holmes applied to the court for an order rescinding the purchase which had taken place four years earlier. She based her case entirely on an old common-law principle involving an erroneous assumption where both a buyer and seller made a mistake about some fundamental quality of the land being sold.

The courts have defined this principle as an error so essential that it goes to the real identity and character of the subject matter of the contract.

Holmes thought she was buying, and Walker thought he was selling, land with a cottage. In fact, the transaction involved a lot without a building even though both parties acted in good faith.

In October, 1997, after hearing arguments, Judge Archie Campbell ruled that rescinding the agreement was not automatic and he denied Holmes her remedy. He found that she “caused the problem by failing to get a survey before closing when it was such an obvious, easy and prudent thing to do.”

The Court of Appeal later agreed.

It’s an important lesson for purchasers, especially of cottage properties: always get an up-to-date land survey.

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Contact Bob Aaron

Bob Aaron is a Toronto real estate lawyer and frequent speaker to groups of home buyers and real estate agents.
He can be reached by email at bob@aaron.ca, phone 416-364-9366 or fax 416-364-3818.

Aaron & Aaron specialize in Real Estate Law, specifically Sale of Rental, Condominium, Residential, Rural Recreation, Offer to Lease, Commercial, and New Construction