Title insurance offers peace of mind and protection when you are buying a home. Whether you are buying a new construction or a resale, a condo or a vacation property, it is an exciting time, and there will be a lot of information that you will be required to understand to ensure everything goes smoothly, and that your investment is protected. Eliminate some of the stress and uncertainty by speaking to your lawyer and ensuring you are protected with title insurance from the beginning.
Do Your Research First Before Purchasing that Vacation Property of Your Dreams
As the summer approaches, many Ontario residents will consider purchasing a cottage or vacation property. While purchasing a second property can be an exciting experience, there are many unique issues that one should take into consideration before signing on the dotted line.
First, find out whether there is an up-to-date survey of the property. A survey is an important document that reveals the dimensions of the lot, the location of structures and easements on the lot, as well as any encroachments onto the property or onto the adjoining properties. If the purchase is being financed with a mortgage, the lender will often require that the purchaser obtain a new survey. This can cost approximately $750. However title insurance will protect lenders and owners against losses that may result from defects that would have been revealed by an up-to-date survey.
Second, find out if there is access to the property. Unfortunately, most purchasers fail to realize that the ability to use and enjoy a property is entirely dependant on access. This is because if access to the property is blocked, it is of little or no value to the owner. More often than not, access to the vacation property will not be by way of a municipal road. It may be by way of a private road that is used by other vacation property owners and is also maintained by these owners. In this case, it could be argued that an owner is trespassing on private roads in order to access his or her property. This is important because purchasers are typically unwilling to purchase a vacation property if access to the property is not guaranteed. In many cases a title insurance company will assume the risk that there may be no access to the property. Should there be a challenge to your right of access in the future, your title insurance coverage would assist in rectifying the situation.
The third matter to consider may also be the most important. As many vacation properties are not connected to municipal services, water is usually obtained from a well. Before purchasing a property, it is crucial for the purchaser to conduct a potability test at the local public health department to confirm that the well water is safe for human consumption.
Many purchasers fail to take this precaution, only to realize later that the drinking water is contaminated and therefore unsafe. A safety issue like this cannot be ignored. In addition to confirming that the water is safe, the purchaser should confirm that the rate of water flow is sufficient for
normal residential use.
Finally, municipalities have the authority to pass zoning by-laws that can place restrictions on how you use your vacation property. For example, the zoning by-law may not allow you to build a deck or a boathouse, or may require that you obtain the approval of the municipality before doing so. More importantly, some properties are zoned in such a manner that only seasonal use is permitted. Thus, if you intend to live in your vacation property on a year-round basis, you may be prohibited from doing so.
As with any large investment, when purchasing a vacation property, it is important to conduct some preliminary investigations to avoid surprises. You can protect yourself by consulting an experienced real estate lawyer and requesting a title insurance policy.
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