Key Information
The following are IMPORTANT considerations when buying a leased land cottage
Conventional mortgages from banks are NOT available for lease land cottages
Year-round use is limited – May to October. unlimited use; November to April 10 days per month
No commercial use e.g. renting your cottage
The following information is intended to address many of the questions that we receive from people who are not familiar with the leased landform of ownership. If you have any other questions that are not addressed below, please call me.
- What are leased land cottages?
- Where can I find leased land cottages?
- What are the costs of owning a leased land cottage?
- What are the lease terms?
- What about water and sewage?
- Can I Get a mortgage to purchase a leased land cottage?
- What about fire, police, and equivalent municipal services?
- Can I get insurance on a leased land cottage?
- What are the typical closing costs for the buyer?
- What are the building and renovation requirements?
- What are the restrictions on using a leased land cottage?
- What are the price ranges and general MLS-related information?
- What is the native contact for more information on leased lands?
- How can I view all of the active leased land cottage listings on MLS or realtor.ca?
- Is there a cottagers association where I can get more information and increase my comfort level with the leasing concept?
- What’s happening in the future?
What are leased land cottages?
The land is owned by the Saugeen Indian Reserve #29 and the federal government and they lease the land for cottages. The physical cottage structure is owned by the cottager but the land is leased and owned by the First Nation band. There are approximately 1250 cottages in total that are managed professionally and openly.
Absolutely, owning a cottage on leased land offers several advantages:
- Varied Lake Huron Properties: Leased land cottages often boast an impressive selection of Lake Huron waterfront properties, providing diverse options for scenic locations near the water or directly on the waterfront.
- Prime Locations: These cottages are often situated in prime locations, either on the water or in close proximity, offering a serene and picturesque setting.
- Cost-Effective: Cottage prices are notably lower, and lease fees typically equate to municipal taxes in the area, making it a more affordable option compared to owning both land and cottage outright.
- Sauble Beach: If your leased land cottage is near Sauble Beach, it's a fantastic perk. With its extensive sandy stretch and high water quality, it's been recognized as a top beach destination in Ontario and Canada.
- Ready-to-Move Cottages: Most leased land cottages are sold fully furnished and equipped, allowing for immediate enjoyment without additional setup hassles.
- Flexibility in Buying and Selling: You have the freedom to buy and sell through regular real estate processes, offering flexibility in ownership.
- Recreational Activities: The area offers diverse and appealing activities, ensuring an excellent cottage experience beyond just the property itself.
- Affordable Initial Cost: The initial cost is notably lower compared to owning both land and cottage outright, making it a highly cost-effective way to own a cottage.
Where can I find leased land cottages?
There are three primary leased land areas on Lake Huron. These areas are located just north of Southampton and extend into the Sauble Beach area.
- Block A – located from the South part of Sauble Beach (Frenchman’s Bay) to the main Street of Sauble Beach. There are sandy beaches along this area with some rocky shores in some locations. Sauble Beach is rated the #1 beach in Ontario by the Toronto Star. There are waterfront cottages as well as cottages within a couple of blocks of the beach.
- Block B – located along Bruce County Road 13 from Southampton to approximately where 2nd Avenue S. meets Bruce County Road 13 in the south part of Sauble Beach. Most cottages are located on the lake with great views of the sunset. The shore is generally rocky and pebbly. Some lots are gently sloping to the shore and others are elevated. There are approximately 347 cottages in this block.
- Chief’s Point – located just north of the Sauble River on the westerly point. There are Riverfront cottages and cottages within a block of the river. This is a great spot if you enjoy boating. Also, good access to Sauble Beach just across the river.
What are the annual lease costs of owning a leased land cottage?
There are no municipal taxes. Instead, you pay to lease the land and a service fee. These fees are due May 1 of each year in one payment. The following chart outlines the approximate costs each year in the 3 areas and reflects the new rates that are effective from May 2021 to May 2026.
|
Description |
Block B |
Block A |
Chief’s Point |
|
Lakefront |
~ 9000 |
~ 9600 |
~ 9600 |
|
Second Row |
~ 4281 |
~ 5800 |
~ 5800 |
|
3rd + row |
n/a |
~ 4600 |
~ 4600 |
|
Annual Service Fee |
1200.00 |
1200.00 |
1200.00 |
The service fees pay for fire protection, land & leasing office, police protection, road maintenance, landfill site, recycling, works department, streetlights, landfill maintenance, landfill monitor, and garbage collection.
Can I get a mortgage to purchase a leased land cottage?
The short answer is NO. Banks have a policy NOT to provide mortgages for any lease land purchase. Some people have arranged private mortgages. Typically, purchasers use cash, equity from their principal residence (increase mortgage), or a line of credit or home equity loan.
The lease terms are as follows:
- The current lease is for 5 years and it expires on May 1, 2026. A new lease will be negotiated at that time.
- The financial terms of the lease are fixed every five years. The current amount is in effect until May 1, 2026
- The rate is set by Saugeen First Nations and the Federal Government. The lease outlines the process used to determine the lease amount. Outside appraisers provide information on price increases in the area and then discounts for the limited occupancy period.
You can request a copy of the lease from the Saugeen Land Management and Leasing office, the address and contact information are listed below.
To view the current lease CLICK HERE
Most lakefront cottages draw their water directly from the lake. However, some have wells. Most non-lakefront cottages have wells of some sort. The Grey Bruce Health Unit published a booklet on safe water for the cottage which you can download from the following site: https://www.publichealthgreybruce.on.ca/Your-Environment/Safe-Water/Private-Drinking-Water
All cottage septic systems must conform to the existing government's standards for septic systems. My advice is that buyers and sellers need to be fully aware of the current status of the septic system and have paperwork to support that the system is compliant with current requirements. Contact Kirk Roote at the SFN Lands and Leasing office (kirk.roote@saugeen.org). Also, be aware that an archaeological assessment of the aseptic area is now required for all septic installations. All leased lots are required to show proof of a compliant system prior to lease renewal in 2026. Information on septic systems is available from the Grey Bruce Health Unit site using the following link: http://www.southbrucepeninsula.com/en/townhall/Well-and-Septic-System-General-Information.asp
What about fire, police, and equivalent municipal services?
The land is owned by the First Nations community and they provide fire and equivalent municipal services. The annual service fees cover these costs. Police service is provided by the OPP in Wiarton with a summer office in Sauble Beach.
Can I get insurance on a leased land cottage?
Cottage insurance can be provided by any regular insurance broker. However, I recommend using a local insurance broker who is more familiar with leased land cottages and can advise you about various coverage options. Cottage owners must have a minimum of $1,000,000 in public liability insurance.
What are the typical closing costs for the buyer?
When you purchase a leased land cottage here are the typical closing costs:
- Home inspection (optional) approx. $400
- Septic Inspection (often at seller's expense) approx. $350
- Lawyer $800 to $1,200
- Insurance on the cottage $600 to $1,000
- Administrative transfer cost $500 (note there is no land transfer fee)
- Survey of the property (optional) $80
I always (strongly) recommend using a local lawyer because they are familiar with the lease, the transfer process, and the personnel involved in the process. I can provide the names of local lawyers.
What are the building and renovation requirements?
Similar to municipalities, building permits are required for new cottages and renovation. There are also setbacks that must be approved by the band. This is no more restrictive than municipalities. Also, note that band permission is required to cut down trees.
Only one residential building is allowed on each lot. Trailers cannot be located full-time on leased lots. If the cottagers have a short-term visitor with a trailer that is ok.
Similarly, Bunkhouses are considered a second residence and will require a building permit, regardless of size. If it is used exclusively as a bunkhouse and not storage it may attract the Band’s attention and the owner may be subject to a change to commercial lease rate (typically double the private cottage rate. Buyers need to be aware of this new restriction.
What are the restrictions on using a leased land cottage?
The lease that you sign has some restrictions that are important to understand before you start looking for a cottage:
- You have unlimited use of the cottage from May to October
- During November to April you can occupy your cottage for a total of 10 days in each month … i.e. not for permanent residence but great for recreational use.
- you cannot use your cottage for commercial purposes such as renting your cottage to the general public
- You can extend the unlimited use of the cottage for 2 months by contacting the Land Management Office and paying an additional lease fee.
What are the price ranges and general MLS-related information?
For information about the number of sales, the average purchase price cost per square foot, waterfront versus non-waterfront cottages, and price profiles click the following link . . . Lease Land 2023 Cottages Review
What is the native contact for more information on leased lands?
The following is the contact information for the Native Leased Land Office: Saugeen Land Management and Leasing P.O. Box 640 Southampton, Ontario, N0H 2L0 519 797-3039 (Weekdays from 9:00 am to 4:30 pm) Email: kirk.roote@saugeen.org
What are the rules and fees to use Sauble Beach?
The band owns and controls Sauble Beach south of Main Street in Sauble Beach. The following document outlines the rules and fees…..click here
How can I view all of the active leased land cottage listings?
On the www.realtor.ca home page
- enter “Saugeen Indian reserve” (no quotation marks required) in the “Where do you want to look?”.
- Press search will give you the listings of all the Real Estate agents in the area. MLS allows any Sales Representative to assist you on any of these listings so please don’t hesitate to contact me.
Or go to my Leased Land listings page that displays all the current MLS listings on Saugeen Indian Reserve 29.
Is there a cottager’s association where I can get more information and increase my comfort level with the leasing concept?
There are 4 cottagers associations
- Block A (French Bay Beach Association). This association covers the French Bay area and north to French Bay Road
- South Sauble Cottage Association - Cottages in the area extending South to North from French Bay Road to Main St. (downtown Sauble) and from the Southampton Parkway to the Beach. This area encompasses approximately 400-plus lots with some of the first established cottages in the region.
- Block B - Block B includes members from 315 cottages along the Lake Huron Shoreline on Bruce Road 13 (ERNs 209-967), Ah-Sineese Crescent (ERNs 1-45) and 2nd Avenue (ERNs 1520-1492). The annual membership fee is $20 and supports the Block B Board which works to collect and address specific concerns from our members. Membership fees support SCOI and include access to scoi.ca
- Chief’s Point - Chief’s Point is a fisherman’s dream area situated on the north side of the Sauble River below the Sauble Falls where the salmon come to spawn.
Saugeen Cottagers’ Organization Inc (SCOI) is the umbrella organization that is the prime interface with the First Nations, especially regarding the new lease.
What’s happening in the future?
The management of the native land is in transition to a new form of governance called the First Nations Land Management Act and Saugeen Indian Reserve 29 is in the process of investigating and voting on this change.
The existing Indian Act, which was enacted in 1876 and has since been amended, allows the government to control most aspects of aboriginal life: Indian status, land, resources, wills, education, band administration, and so on. Since Canada was created in 1867, the federal government has been in charge of aboriginal affairs.
The First Nations Land Management Act is a federal law enacted in 1999. It provides signatory First Nations the authority to make laws concerning reserve lands, resources, and the environment. The First Nations Land Management Act ratifies the Framework Agreement on First Nations Land Management. A Land Code is a law created by a First Nation to replace the 32 land management sections of the Indian Act. If members of a First Nation vote yes to a Land Code, this means that the Government of Canada no longer has a say in how the community’s reserve lands are managed.
This transition is not expected to have a big impact on lease land cottages since the band remains committed to the concept as well as the revenues.
Call Me
I understand the importance of making informed decisions when it comes to buying a leased land cottage. Whether you're seeking information, have questions about the process, or want guidance on this unique property type, I'm dedicated to providing comprehensive assistance. Contact me, and let's navigate this together.