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What is the difference between an easement and a right of way?
Disclaimer: This article on easements vs. rights of way is intended for the purpose of providing information only. It is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
As a homeowner or landowner, it’s important to know who can come onto your property and why. In this easy-to-understand guide, we’ll explain the basics of property rights, helping you understand who’s allowed on your land and for what reasons. We’ll walk through the difference between an easement and a right of way.
At Beeksma Law, we specialize in real estate issues that are unique to rural properties – such as shared well agreements – and can provide advice on your rural property.
What is the difference between an easement and a right of way?
At first glance, easements and right of ways may seem interchangeable. They both allow someone else the right to use your property, but they have distinct purposes in property law.
What is an Easement?
An easement grants specific rights to someone other than the property owner, allowing access or use of a portion of the property for a particular purpose. This could include granting your hydro company the right to access your land for maintenance or allowing a neighbor to use a shared driveway. In legal terms, there’s a dominant tenement (the property benefiting from the easement) and a servient tenement (the property burdened by the easement).
What is a Right of Way
On the other hand, a right of way permits someone to pass through your property to reach another destination. We see these on occasion in recreational properties, such as cottages. In this scenario, the waterfront owner grants an easement to the landlocked property, allowing them access to the shorefront.
Easement vs. Right of Way: Why Does it Matter?
Understanding the difference between easements and right-of-way is essential, especially when you’re buying or selling a property. Firstly, they have legal implications since they’re registered on property titles, which could lead to disputes or surprises down the line. Secondly, they dictate how you can use your property, whether it’s for utility access or shared spaces, so clarity is key for getting along with your neighbors. Lastly, while they might not always directly impact property value, they can influence how potential buyers see the property, so being well-informed helps you make smart investment choices.
Types of Easements
There are different easements that can be registered against your property. Let’s consider just a few examples.
Utility Easements
This is the most common type of easement and one that virtually every property has registered on title. Your property likely has an easement allowing the utility company to access underground lines. While you own the land, the utility company has the legal right to conduct maintenance as needed.
Shared Driveways
Usually, when a property owner divides a lot and establishes a shared driveway between the properties, it’s known as severing a lot. When this happens, the express grant is recorded on the property’s title. It’s important to note that all agreements regarding land interests must be documented in writing; verbal agreements are not legally acceptable. Easements should be registered on the titles of both the dominant and servient properties, with the dominant land listed as “together with” in the description and the servient land listed as “subject to” to ensure proper recording of the easement.
Conservation Easements
Conservation easements are gaining popularity, restricting development on a property to preserve natural resources. While limiting your usage, they serve broader environmental goals.
Navigating Easements and Right of Ways: Tips for Homeowners
When dealing with property transactions involving easements or right-of-ways, several important factors must be considered. First and foremost, it’s crucial to do your due diligence before finalizing any purchase. This means performing a comprehensive title search to uncover any existing easements or right-of-ways that could affect the property.
Next, it’s essential to have a clear understanding of your responsibilities regarding maintenance, access, and usage rights outlined in the easement or right of way agreement. Seeking advice from a real estate attorney can provide valuable insight if you’re unsure about the implications of these agreements, ensuring that your rights and obligations are clearly defined. Additionally, any modifications or agreements related to easements or right of ways should be documented and legally binding to prevent potential disputes down the line. Finally, it’s important to consider how these easements or right of ways might impact your long-term property plans, allowing you to make informed decisions during the transaction process.
Beeksma Law: Your Partner in Rural Property Law
When it comes to legal advice for your rural property, Beeksma Law is your go-to source. With their wealth of experience and dedication to client satisfaction, they offer invaluable guidance on easements, right of ways, and all property-related matters. Whether you’re buying, selling, or managing rural property, you can trust Beeksma Law to protect your rights and ensure your interests are always taken care of.
New Federal Tax Changes for Canadian Short-Term Rentals
Disclaimer: This article on federal tax changes to short-term rentals is intended for the purpose of providing information only. It is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
In Ontario, the housing crisis looms large, with rental expenses soaring and homes in short supply. Despite efforts by many provinces and municipalities to place restrictions on short-term rentals like those on Airbnb and VRBO, the problem persists.
Changes Announced for Short-Term Rental Tax Deductions
As part of its fall economic statement in late 2023, the federal government announced new income tax measures. These came into effect as of January 1, 2024, and may impact you if you own a property that you rent out for short periods (generally defined as fewer than 28 days). Aimed at addressing housing inventory challenges and regulating the STR industry, these measures have sparked a mix of reactions within the cottage community.
In a nutshell, if you own a property in a municipality where such rentals are prohibited and rent it out for short periods of time, you will no longer be able to claim any expenses against your rental income. This also applies to short-term rental operators who fail to comply with applicable provincial or municipal licensing, permitting, or registration requirements; they will also lose tax benefits.
For example, suppose you own a cottage in a municipality that restrictions vacation rentals. You earn rental income from occasional stays. In such a scenario, the new tax measures mean that you will no longer be eligible to deduct any expenses associated with your rental income. These expenses typically include property taxes, mortgage interest, maintenance, utilities, and insurance. Similarly, if you earn short-term rental income but fail to adhere to local regulations, such as obtaining the necessary licenses or permits, you will also forfeit any income tax deductions for expenses incurred.
The reasoning behind this move is to discourage homeowners from using their rental properties in this way and promote the availability of housing for permanent residents.
Are Short-Term Rentals Permitted in Your Municipality?
You may wonder – can I list my property on a rental platform in my municipality? Will I still be able to claim expenses related to this income? Below we will consider some municipalities and their bylaws.
Note: Please check with your municipality to ensure that there have not been any recent updates to their bylaws and requirements.
Hamilton
Hamilton introduced a licensing pilot program for principal residence units in late 2023.
The term “principal residence unit” denotes a specific dwelling within a property where an individual resides and carries out their daily activities. This restriction on short-term rentals confines operators to obtaining only one license, which must correspond to their primary dwelling. Consequently, it prevents commercial or multiple listing operators from obtaining licenses for STRs.
Huntsville
Accommodation providers must ensure registration, while units will be inspected to ensure they comply with building codes. Any operator offering stays of fewer than 30 days must impose and collect Municipal Accommodation Tax (MAT). This 4% MAT applies exclusively to accommodation revenue, excluding additional charges such as cleaning fees, security deposits, or other taxes and fees.
Owen Sound
Effective March 1, 2024, short-term rentals within the City of Owen Sound are required to obtain licensing in accordance with the City’s Short-Term Rental Licensing By-law. These are restricted to the property of the operator’s principal residence, which serves as their primary address for bills, identification, taxes, and insurance.
Furthermore, short-term rentals are limited to operating for a maximum of 180 days per year and operators must maintain a detailed log. Additionally, operators are obligated to furnish each group of visitors with a visitor’s guide and a code of conduct. Lastly, owners must adhere to specific requirements, including the provision of a site plan, fire-safety plan, and parking management plan.
Collingwood
In Collingwood, short-term rentals (STRs) are currently prohibited, despite the prevalence of illegal operations. However, a bed and breakfast (B&B) business may be permissible under certain conditions, such as not occupying the entire gross floor area of a single detached dwelling unit. The municipality has proposed a new licensing system, intending to issue 200 licenses annually.
These licenses would be categorized into three types based on the nature of the unit. Entire-unit options would be subject to a maximum rental period of 180 days per year, and owners must apply and pay for a license annually, ensuring compliance with the bylaw, Ontario Building Code, and fire codes through inspections. Additionally, the property being rented out must serve as the owner’s principal residence.
Beeksma Law: Your Rural Real Estate Partners
Prospective rural real estate buyers encounter a unique set of considerations that are different from urban property purchases. Beyond the basic aspects of location and property size, factors, like shared well agreements, septic systems, and zoning regulations, become crucial when deciding whether or not to purchase or retain an investment property.
Shared well agreements, for instance, necessitate a thorough understanding of the responsibilities and rights associated with communal water sources, ensuring equitable access and maintenance among multiple property owners.
At Beeksma Law, we have assisted many rural property owners in addressing the intricacies of such purchases, offering invaluable guidance to clients seeking to make informed decisions in this specialized market. With their depth of knowledge and commitment to client satisfaction, Beeksma Law stands ready to assist buyers in achieving their rural property ownership dreams. Reach out to them today to embark on a seamless journey towards rural real estate ownership.
What You Need to Know About Breaking Your Commercial Lease
Disclaimer: This article on breaking your commercial lease is intended for the purpose of providing information only. It is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
Perhaps you are a business owner who has outgrown your current space. Or you are a landlord who has reached your limit with a difficult tenant. Regardless, one thing is clear: you need to break that commercial lease.
This article will explore the process and what you should consider before breaking your lease. We will discuss this question from the perspective of both tenants and landlords.
(Negotiating your commercial lease? Feel free to read this article on what you need to know.)
The Significance of Commercial Leases
Commercial leases are legally binding agreements. They outline the terms and conditions governing the use of commercial properties. These leases play a crucial role, defining the rights and obligations of the tenant and the landlord.
Lease agreements can be complex and specific to each situation. As such, the process of breaking a commercial lease may vary. The terms of your lease will dictate what you can do next. Below, we’ll explore some common strategies for both tenants and landlords:
Breaking a Commercial Lease as a Tenant
Breaking a commercial lease in Ontario as a tenant requires careful thought. You must adhere to the terms of your lease and to legal procedures. Here are several strategies tenants can consider:
Give Your Landlord Notice
When ending a lease that has a specific term, you can give your landlord notice. For monthly leases, one month’s written notice is typically required.
Landlord Breach of Lease
If your landlord does not follow the terms of the lease, you may have grounds for ending it. This can occur if the landlord impacts your business by altering access to the property. In such cases, you can consider the lease terminated and sue the landlord for damages.
Sublease Agreement
Under certain situations and with landlord consent, you can sublease all or part of the rented property. This allows you to pass on the use of the property to another subtenant. Keep in mind that you remain financially responsible for the original lease.
Assignment Agreement
Similar to subleasing, you can assign your lease to a new tenant. This means the new tenant takes over your tenancy and the terms of the lease. The landlord must agree to this arrangement.
Breaking a Commercial Lease as a Landlord
Landlords can also face situations where they may think they need to break a commercial lease. However, they do have other options.
Distraint:
Distraint is seizing someone’s assets to be paid for money owed. Landlords may be able to use this remedy to deal with outstanding rent. In that instance, they would enter the premises and seize goods with a value up to the amount of outstanding rent.
Damages:
Landlords can sue tenants for monetary damages resulting from breaches of the lease terms. For example, if a tenant causes significant damage to the property beyond normal wear and tear, the landlord can seek compensation for repair costs
Injunction:
Seeking an injunction can stop a tenant from engaging in activities prohibited by the lease. For example, if a lease explicitly forbids using the rented space for specific activities, such as operating a noisy nightclub in a residential area, and the tenant violates these terms, the landlord can seek an injunction.
Specific Performance:
Landlords can seek an order of specific performance to force a tenant to fulfill lease obligations.
However, sometimes a landlord’s only option is to terminate the lease. Here are some common remedies that are available.
Forfeiture:
Landlords can terminate the lease by providing written notice to the tenant and preventing them from entering the premises.
Writ of Possession:
In some cases, physically excluding the tenant is impractical. In those cases, landlords can obtain a writ of possession to take possession of the property on their behalf.
Seek Professional Assistance to Break Your Commercial Lease
Whether you’re a tenant or a landlord, breaking a commercial lease in Ontario is no simple matter. It’s essential to consult an experienced business lawyer to ensure as smooth a process as possible.
If you find yourself in such a situation, don’t hesitate to reach out to legal experts like Beeksma Law. Our team of experienced lawyers has the expertise to guide you through the process and protect your interests. Book your complimentary consultation today!
Small Spaces, Big Questions: Navigating Land Leases and Legalities for Tiny Homes in Ontario
Disclaimer: This article on owning a tiny home in Ontario is intended for the purpose of providing information only. It is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
As rents and housing prices become increasingly less affordable, more Ontarians are looking into tiny homes. For example, Ancaster’s first Tiny Homes Show was held in August 2022 and drew over 2,000 visitors and had over 20 speakers presenting on a variety of topics. Shows like Tiny House Nation have become increasingly popular and many wonder if a tiny home may be the solution.
With their cozy interiors, clever design features, and the promise of financial freedom, tiny homes have become appealing. Many see tiny homes as a way to downsize, reduce their ecological footprint, and embrace a more intentional way of living.
However, what legal issues should you consider before selecting your floor plans? What are the challenges to legally owning and parking a tiny home? What should you consider if you want to build a tiny home in Ontario?
This article will consider these questions and more. Whether you are looking at a tiny home or a [something], it is important to have the right real estate lawyer by your side. Our team of legal experts will guide you through the intricacies of home ownership, helping you navigate the legal landscape and ensure compliance with local regulations.
What is a Tiny Home?
In Ontario, a tiny home refers to a small, self-contained dwelling that typically ranges from 100 to 500 square feet in size. These homes are designed to maximize functionality and efficiency within a limited space. Tiny homes in Ontario often prioritize sustainable living, minimalism, and affordability, making them an attractive alternative to traditional housing options.
While each municipality will have its own requirements, the tiny house construction bylaws mandate that a tiny home must measure between 17.5 ft2 (188 ft2) and 37 m2 (400 ft2 ). It must also meet these requirements:
- It must meet the Ontario Building Code requirements for health and safety;
- You must be able to live in it year-round
- It must have an area for dining, living and sleeping and have a functional kitchen and bathroom.
- It must have sewage and water hookups.
Financing your tiny home
It’s worth noting that it’s incredibly difficult to secure financing for your tiny home. Lenders are reluctant to provide traditional mortgage loans for tiny homes due to their unique nature and less confidence in their resale value. However, there are still financing options available to help you fund your tiny home project. For example, if you are purchasing from a tiny home builder, they will typically have their own financing plans in place.
Municipal requirements for your tiny home in Ontario
The municipality where you intend to park your tiny home will have various bylaws and zoning requirements that may affect you.
These include:
- Minimum lot size
- Minimum residential building size
- Distance from lot lines and/or a public street
- Height requirements
- Parking needs
- Access to municipal services (sewage, electricity etc.)
- Architectural design
- Access for emergency services.
Land Lease to Park Your Tiny Homes
Finding suitable land to park your tiny home is a critical step in realizing your tiny living dreams. Whether you’re looking for a permanent location or a temporary spot, there are several factors to consider when searching for the ideal piece of land.
However, like any agreement, you’ll want to consider carefully your land lease. Some areas to consider include:
- Utilities
Can you connect to essential utilities, such as water, sewage and electricity? How will the costs be shared? Are there any restrictions to your use of the utilities?
- Maintenance costs
Clarify the costs associated with the land lease. In addition to the monthly rent, are there any other fees, such as property taxes, maintenance fees, or utility expenses? Who is responsible for maintenance and repairs to the property, such as landscaping and snow removal? Discuss any potential increases in rent over time and whether there are provisions for negotiating lease terms in the future.
- Your use of the land
When leasing land to park your tiny home, it’s essential to discuss and understand your permitted use of the property. Are there any restrictions or limitations on the activities you can engage in on the land? Are there specific rules regarding modifications to the land or the number of occupants allowed? It’s important to clarify these details to ensure that your intended use aligns with the terms of the land lease.
- Lease term and termination
Review the lease duration and termination conditions carefully. Is the lease for a fixed term or a month-to-month basis? Understand the process for terminating the lease and any penalties or notice periods involved. It’s also important to consider if there are any options for lease renewal or extension if you plan to park your tiny home on the land for an extended period.
Beeksma Law: Answering all of your big questions
At Beeksma Law, our commitment to exceptional client service, attention to detail, and in-depth knowledge of Ontario real estate laws set us apart. Contact Beeksma Law today to schedule a consultation and take the first step towards making your home ownership dreams a reality.
Factors to Consider When Buying Land Lease Cottages
Disclaimer: This article on land lease cottages is intended for the purpose of providing information only. It is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
At Beeksma Law, we assist in various areas of real estate law. Real estate is a broad area and includes many facets, from residential purchases and sales to commercial leases.
Another area of real estate law is that of land leases. In this and the following two articles, we will discuss three different types of land leases:
- Land lease cottages
- Retirement communities
- Tiny Homes
First, let’s consider land lease cottages.
What is a land lease cottage?
A land lease cottage is a cottage situated on a First Nations reserve. It is leased by the band rather than owned by the cottage owner. In this arrangement, the cottage owner owns the cottage itself but does not own the land it sits on. Instead, they pay a rental fee for the use of the band, which retains ownership of the land.
For example, there are two Saugeen reserves near Sauble Beach: Chief’s Point 28 and Saugeen 29. Both reserves have land that the band leases to cottage owners using this arrangement.
Their current lease agreement provides that cottagers can live in the cottage from May 1st to October 31st.
They can also either:
- stay for ten days per month from November 1st to April 30th for recreational purposes; or
- pay an additional fee of $600+ per month to extend the season for up to two months.
Additionally, all cottage owners must pay an annual service fee of $1,000. This fee covers services such as policing, fire, garbage pick-up, and lighting.
The annual lease fee ranges depending on how close the property is to the lake, but the fee is similar to what property taxes are in the same area.
Why consider a land lease cottage?
Purchasing a land lease cottage in Ontario can be an affordable and enjoyable way to enjoy a waterfront cottage without the expense and responsibility of owning the land.
For the two reserves mentioned above, a land lease cottage allows you an excellent selection of properties close to or right on Lake Huron. The initial cost is three to four times lower than purchasing a traditional home or cottage.
Restrictions when purchasing a land lease
There are some factors to consider before purchasing a land lease cottage.
Your land lease will have restrictions in place regarding access to your cottage. For example, you may only have access to your cottage from May until October. Additionally, you cannot get a mortgage for the purchase price of a land lease – you must pay the full amount.
If you buy a home that is on leased property, it’s important to note that you cannot – and likely will never be able to – buy the land.
Additionally, you cannot use your cottage on leased lands as a short-term rental (for example, placing the property on AirBNB) and there may be limitations on how you can change the structure itself.
Factors to Consider Before Purchasing
There are several important factors to consider before making a decision.
Firstly, it’s essential to understand your lease terms. The lease will outline the length of the lease, the rental rate, and any rules or restrictions on the use of the property. It’s important to review the lease carefully with a lawyer to ensure that you understand your rights and responsibilities.
Secondly, it’s crucial to assess the condition of the cottage and any improvements on the property. A professional inspector should conduct a thorough examination of the cottage to ensure that it is in good condition and free of any defects or damage.
Finally, it’s essential to understand the risks associated with owning a land lease cottage. When you lease the land, you do not own the property, and the landowner may have the right to terminate the lease or sell the land. It’s important to ensure that the lease is renewable and transferable and to have a contingency plan in case the band decides to terminate the lease.
Understanding your Real Estate Options
Purchasing a land lease cottage in Ontario means you can enjoy a waterfront property without the expense and responsibility of owning the land. At Beeksma Law, we would be happy to discuss your real estate needs with you and provide any legal advice as you navigate your options. Contact Beeksma Law today to book your complimentary call!