Survey Shows Encroachment on a Cottage You're Buying: Ontario

You have a conditional offer on a cottage, the survey comes back, and it shows the boathouse, shed or septic bed crossing the lot line. It is a stressful moment, especially when the closing date is close. The good news is that encroachments are not unusual, and there are usually several ways to deal with them before you commit.

This article explains why the type of land title matters, what the law says about long use of someone else's land, how easements fit in, and what to check for waterfront structures. It is general information. The right solution depends on the survey, the title and your agreement of purchase and sale, so a lawyer should review them together.

The first step is to understand which way the encroachment runs: your property's structure on the neighbour's land, or the neighbour's structure on yours.

Why an encroachment matters

An encroachment can affect more than the structure itself. It can raise questions about who owns the land under it, whether the neighbour can demand removal, whether a lender or title insurer will accept the risk, and whether you can sell later without the same problem. Septic systems add another layer, since a bed that sits partly on another lot may affect both ownership and the approvals tied to it. The rules on septic setbacks and approvals need to be confirmed with your lawyer and the local authority, because they depend on the property.

Which direction the encroachment runs matters as well. If your future boathouse crosses onto the neighbour's land, you are the one exposed. If the neighbour's shed sits on your lot, you may have a right you could lose by doing nothing.

Registry versus Land Titles: why long use may or may not matter

In Ontario, land is recorded in one of two systems, and the rules on long possession differ. Under the Real Property Limitations Act, no one may bring an action to recover land except within ten years after the right first accrued, and when the period expires the former owner's right and title are extinguished, not merely the right to sue. That is the basis of adverse possession claims.

For land registered under the Land Titles Act, the picture changes. Despite the Real Property Limitations Act or any other Act, no title or interest in land registered under the Land Titles Act that is adverse to the registered owner can be acquired by length of possession or prescription. Possessory title claims therefore work in practice only for land in the older Registry system, or where a claim was already complete before the land came under land titles.

There are further wrinkles. Land Titles Act s. 44(1) says registered land is subject to overriding interests unless the register says otherwise, and one of them is a title or lien acquired by possession or improvements by an owner of adjoining land. A parcel is not subject to that paragraph if a notice of first registration was properly served with an accurate description and no objection was filed. Whether any of this applies to your lot is a title question for your lawyer. Court decisions can also affect how these rules work, so do not rely on a general summary.

Easements and rights of way

Sometimes the practical fix is not moving the structure but getting a written right to keep it or to cross the land. A right of way or other easement can be created, and a claim to one is not defeated merely by showing it began before a 20-year period; after 40 years of enjoyment the right is treated as absolute unless granted by express written consent. Prescriptive easements apply to Registry-system land, and Land Titles Act s. 51 bars prescription against registered land.

A right of way over a neighbour's land is secure mainly when it is a registered easement or a deeded right of way. An unregistered, informal arrangement generally should not be relied on without a court declaration. A transfer of easement is registered against the servient land, and the grantor must own that land. Registration practice has changed since the 2005 guidance, so the current ONland procedure should be checked.

Waterfront structures: more than just title

If the structure is a dock or boathouse, a clean title is only part of the story. Other rules may apply on top of it.

• Conservation authority permits: development in hazardous land, wetlands, river or stream valleys or certain shoreline areas, or altering a watercourse, generally needs a permit. Exceptions include seasonal or floating docks up to 10 m2 and small non-habitable accessory structures up to 15 m2 outside wetlands and watercourses.
• Federal minor works: a dock or boathouse is a minor work only if it meets criteria such as being at least 5 m from adjacent property boundaries and taking up no more than one-third of the water's width. Where the Order is met, the work may proceed without an application for approval, and on charted navigable waters the owner must notify the Canadian Coast Guard before work begins.
• Crown shore land: a structure in physical contact with more than 15 m2 of Crown shore land may need a work permit, and doing work without a needed permit is an offence. A structure that floats above shore lands is not treated as in physical contact.
• Shore road allowances: a municipality can only get rid of an established highway through a closing by-law after public notice. Structures on shore road allowances can cause problems with land transfers, mortgages, insurance claims and estates.

A boathouse that crosses a lot line may also fail the 5 m setback from adjacent property boundaries, which can affect whether it qualifies as a minor work. Municipal dock and boathouse by-laws and building permits are separate matters to check locally.

What to do next before closing

Do not waive your conditions or let the closing date pass without a plan. The options generally fall into a few groups: ask the seller to resolve the problem before closing, negotiate a price change or holdback, seek a written easement or boundary agreement with the neighbour, extend the closing date, or walk away if your agreement allows it. What is available depends on the wording of your agreement and the type of encroachment.

• Send the survey to your real estate lawyer immediately and note any condition deadlines in your agreement.
• Ask whether the land is in the Registry system or Land Titles, and what easements are shown on title.
• Identify which way the encroachment runs and how much land is involved.
• Ask the seller for permits, approvals and any existing agreement with the neighbour about the structure.
• Contact the local conservation authority about waterfront or shoreline structures.
• Ask your lawyer and insurer how the issue affects title insurance and mortgage financing.
• Get any agreement with a neighbour in writing and registered where appropriate.

Frequently asked questions