Key Information

The following are IMPORTANT considerations when buying a lease land cottage

• Conventional mortgages from banks are NOT available for lease land cottages
• Year-round use is limited – May to Oct. unlimited use; Nov 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 land form 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 lease land cottage?
• What about fire, police and equivalent municipal services?
• Can I get insurance on a lease 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 owed 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 in a professional and open manner. Some of the reasons to consider owning a leased land cottage include:

• a excellent selection of Lake Huron waterfront properties
• great locations either on the water or very close to the water
• cottage prices are much lower and the lease fees are equivalent to municipal taxes in the area
• Sauble Beach, with 11 kilometers of sand,  was voted the number one beach in Ontario in May 2002 and declared one of the top ten beaches in Canada in 2004
• Sauble Beach water quality tests high quality  on a regular basis
• most cottages are sold fully equipped and ready to move in and enjoy
• you are free to buy and sell whenever you wish through the normal real estate process
• an area that continues to offer a whole variety of very attractive activities and an excellent cottage experience
• generally the initial cost of leased land cottage is three to four times lower than a cottage where you own both the cottage and the land.
• . . . a very affordable way to own a cottage.

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 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 shore in some locations. Sauble beach is rated the #1 beach in Ontario by the Toronto Star. There are water front 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 2 nd 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 River front cottages and cottages within a block of the river. This is great spot if you enjoy boating. Also, good access to Sauble Beach just across the river.

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. The following chart outlines the approximate costs each year in the 3 areas and reflect the new rates May 2021:

The service fees pay for: fire protection, land & leasing office, police protection, road maintenance, landfill site, recycling, works department, streetlights, landfill maintenance, landfill monitor, garbage collection. The view the current brochure click here

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 principle residence (increase mortgage) or use a line of credit.

The lease terms are as follows:

• The current lease is for 5 years and it expires 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. Basically outside appraisers provide information on price increases in the area and then discounted 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 is listed below. To view the existing lease online click here

Most lakefront cottages draw their water directly from the lake. However, some have wells.  Most non lake front 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 governments 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 this status. 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

The land is owed by the First Nations community and they provide fire, and equivalent municipal services. The annual service fees cover these costs. For more information click here. Police service is provided by the OPP in Wiarton with a summer office in Sauble Beach.

Can I get insurance on a lease land cottage?

Cottage insurance can be provided by any regular insurance broker. However I recommend using a local insurance broker who are more familiar with lease land cottages. Cottage owners must have a minimum of $1,000,000 liability insurance.

What are the typical closing costs for the buyer?

When you purchase a lease land cottage here are the typical closing costs:

• Home inspection (optional) approx.. $400
• Septic Inspection (often at sellers 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

What are the building and renovation requirements?

Similar to municipalities, building permits are required for new cottages and renovation. There are also set backs 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.

The lease that you sign has a number of 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 the months 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 Cottages 2020 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 and this 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.