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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. Iis 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.

Considerations for Buying Rural Properties

Disclaimer: This article is intended for the purpose of providing information on rural property in Ontario and 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. Updated October 2023.

Driven by rising house prices and the COVID-19 pandemic, more than 64,000 people left Toronto between mid-2020 and mid-2021. Many families are reevaluating their situations and are seeking greener pastures, quite literally.

Rural properties are becoming more popular as people are looking for more space and a slower pace of life. If you’re considering making a move to the country, there are a few things you should keep in mind.

There are considerations that you will want to consider for your family. For example, if you work from home, consider the internet quality and reliability in the area. If you have children, consider the schools and extra-curricular activities that are available. Don’t forget to account for the extra-long commute when you do need to go to the office.

However, from a legal standpoint, there are also differences in purchasing a rural property compared to an urban or suburban one. In this article, we will outline those unique requirements.

That includes:

Of course, we encourage you to book a call with our team as soon as you have made an offer on your next dream home. We’re here to help and would be more than happy to answer any questions you may have.

Accessing Your Dream Home

You may have found your dream home, but can you access it?

Road access can be a critical concern, especially for waterfront or vacation properties. Sometimes, the access road or driveway crosses private land, and there may be no guaranteed legal right of use. Responsibilities for road maintenance are often unclear, creating the risk of access restrictions or unexpected repair expenses.

Your lawyer’s title search may involve tracing legal access through private properties to connect to a municipal road. Title insurance can help resolve access problems, but it’s not always available.

In Ontario, many bodies of water are encircled by a shoreline road allowance owned by the Crown. Typically, municipalities sell this road allowance to property owners. If this applies to the property you’re buying, it might encompass multiple parcels and PINs (Property Identification Numbers).

When reviewing a legal description that references a past instrument number, your lawyer will have to verify that it covers all the land you expect to acquire.

For properties where the shoreline road allowance hasn’t been purchased and conveyed, inquire about the proximity of any improvements to the water’s edge. Suspicion of encroachments onto the shoreline road allowance should prompt consideration of obtaining a survey.

Septic Systems Inspection

When you are buying a rural home that has a septic system, you will want to do a septic system inspection. In fact, your lender will usually required that it be done before approving your mortgage.

Many homeowners that are selling will provide it automatically, but if not, you will need to get this done.

The septic systems inspection will check items such as the size of the septic tank, the location of the leach field, and the condition of both. The inspector will also look for any signs of damage or leaks. This is important because if there are any problems with the septic system, it can be very expensive to fix.

Water Test

Another inspection that you will need to have done is a water inspection. If your home has a well, then you want to make sure that the water that you are getting is safe. Poor water quality can cause health problems, taste unpleasant or be costly to treat.

Therefore, if the seller does not provide this information to you, you will need to have a water inspection conducted to ensure that your water is not contaminated. Your realtor or our team can direct you how to have those tests completed.

Shared Wells & Shared Well Agreements

Rural real estate transactions can present unique challenges, and one such complexity involves shared wells. In rural areas, properties might rely on wells, some of which are shared among neighbors.

If you’re considering purchasing a property with a shared well, there are several crucial considerations.

Shared Well Agreement: Verify if there is a shared well agreement in place. The absence of such an agreement can lead to disputes and confusion regarding maintenance, repairs, and water usage responsibilities. Ensure there’s an agreement before finalizing your purchase.

Existing Shared Well Agreement: If a shared well agreement exists, obtain a copy and review it with legal counsel to understand your rights and obligations. The agreement should outline maintenance, cost-sharing, and water usage limitations.

Well and Water Quality: Assess the condition of the shared well and the water quality. If issues arise, negotiate repairs or upgrades with other parties sharing the well.

Risks and Limitations: Understand the potential risks of shared wells, such as contamination or overuse. Shared well agreements can restrict property modifications, so consider how they impact your future plans, such as pool installation or well expansion.

Title Restrictions: Unlike shared driveways, shared well agreements are typically not registered on property titles. However, it’s advisable to have such agreements prepared and passed from owner to owner.

Learn more about shared wells here.

Planning Act Contraventions

Because rural properties are generally not part of a plan of subdivision, our team will check for any Planning Act contraventions as part of our title search process.

Surveys

If you are purchasing a property that is either zoned agricultural or mixed-use, you will likely need to have a survey done before purchasing the property.

Otherwise, you may opt to have a survey done to be sure of the property boundaries. This is especially true if your property is large and open, with no fencing to mark those boundary lines.

This is something that you can discuss with your realtor or our team. Surveys can take months to complete, so unless it is zoned, as noted above, you can have that completed following your closing date.

Make a Move: Buying a Rural Property in Ontario With Beeksma Law

As you move out to the country, be sure to take the proper legal steps in your move. With offices in Hamilton and Owen Sound, Beeskma Law is poised to be able to handle your transition from urban to rural living. Our team is experienced in rural property transactions and would be more than happy to help you with any questions that you may have. Contact us today!

What You Need to Know About Breaking Your Commercial Lease

breaking your commercial lease agreement in Ontario

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

Cottage Dreams and Legal Realities: What to Consider Before Buying a Vacation or Investment Property in Ontario

Disclaimer: This article on buying a cottage is intended for the purpose of providing information only. It is to be used only for the purposes of guidance. We do not intend that you rely on this article as legal advice and it does not purport to be exhaustive.

Many city dwellers dream of escaping the hustle and bustle of their everyday lives for the idyllic tranquility that a cottage promises. We can almost feel the cozy campfires, see the serene lakes, and breathe in the fresh, crisp air. 

Whether it’s picturing a peaceful retreat, a place to bring family together or an investment property to diversify your income, many people dream of owning a cottage. While there are many opportunities in rural Ontario to make your cottage dreams a reality, there are also many factors to consider. 

In this article, we will talk about some of those realities and how to make sure that you are making the right real estate choices for you and your family. If you own a cottage and are wondering how to include it in your estate plan, read this article here

Buying a Cottage 

There are a couple of areas that you will want to talk to your real estate team about before buying a cottage. 

Is your property zoned seasonal? If that is the case, that means that the municipality may not provide services – such as snow removal – which may prevent you from enjoying your property year-round. 

Is your property on a shoreline? If so, you will want to confirm your access rights as as they relate to the water and the shoreline. You will also need to confirm that the local conservation authority has not placed any restrictions on how you can use the shoreline. 

Other Rural Property Considerations 

There are specific considerations that you need to think about when buying a rural property, such as the examples listed below. (This list is not exhaustive – you will want to discuss your property with your real estate professionals.)

Shared Well Agreements

As we mentioned in this article, some properties share a well with their neighbours and require a shared well agreement. This well help determine who is responsible for any maintenance that comes up and if there are any limits to its use. 

Surveys to be completed 

When purchasing an agricultural or mixed-use property, a survey is typically required. However, for other properties, a survey can be optional. It is helpful to determine accurate boundary lines, especially in large, unfenced properties. Surveys can take months to complete. Therefore, it’s advisable to discuss scheduling it after the closing date unless it’s a required zoning requirement.

Water Testing & Septic Tank Inspections

Does your property connect to the municipal water supply and sewer system? If not, your lender will typically ask for two inspections: water testing and septic tank inspections. These inspections ensure that your water source and sewage systems are safe, giving you and your lender peace of mind.

Your water test will examine various parameters such as bacterial contamination, mineral content, pH levels, and any harmful substances. Septic tank inspections are equally important when it comes to cottage properties not connected to the municipal sewer system. An inspection evaluates the overall condition of the septic system. The inspector will check for any signs of malfunction or damage that could pose environmental and health risks. 

Investment Properties & Short-Term Rentals 

Purchasing a cottage with the intention of using it as an Airbnb can be an exciting opportunity to generate income. However, before making a purchase, it’s essential to familiarize yourself with municipal requirements and bylaw restrictions. 

For example, Collingwood’s zoning bylaw defines “short term accommodation” under it’s Zoning By-law No. 2010-40 as:

“the use of a dwelling unit, or any part thereof, that is operating or offering a place of temporary residence, lodging or occupancy by way of concession, permit, lease, license, rental agreement or similar commercial arrangement for any period of 30 consecutive calendar days or less, throughout all or any part of a calendar year.”

That same bylaw only allows short-term rentals in bed and breakfast establishments.  

On the other hand, Owen Sound recently defeated a motion to limit some short term rentals. 

Each municipality in Ontario has its own set of regulations that govern short-term rentals, ensuring compliance with safety, zoning, and taxation standards. If your intention is to use your cottage as a short term rental property, make sure that you are legally able to do so. 

Beeksma Law: Helping you enjoy your vacation property

At Beeksma Law, we want to help you navigate the complexities of buying a cottage property in Ontario. We are here to ensure you can enjoy your vacation property to the fullest. We understand the unique considerations and legal requirements involved in cottage ownership. Therefore, our team can provide expert advice and guidance throughout the process.

Book your complimentary consultation with our team today to discuss your cottage property needs. Our dedicated team of professionals is ready to guide you through the process and protect your interests.