In 1882 James Paterson, farmer in Tillywater, Monymusk and his wife Sophia received a building lease on land to the east of Oakbank and erected the dwelling house known as Tillywater, doubtless named after his farm. James Paterson did not anticipate staying in his new dwelling as it was let out to four tenants, a practice which followed for many years.
In 1891 there were three tenants staying in the property; James Bruce, a stone cutter, and his wife Mary; John Dawson, a labourer on the roads, his wife Barbara and their one month old daughter, also Barbara; and Alexander Ewen a driller at the quarry his wife Christine with their family, Christine and Alexander; the fourth dwelling was unoccupied. These dwellings each consisted of two rooms.
James and Sophie Paterson had two daughters, Mary and Isabella. Mary married Alexander Gill, miller, Mill of Drumnahoy, Cluny, with whom her parents eventually stayed, and Isabella married William M. Morgan who died as a young man of 31 in 1888.
In December 1899 James Paterson gave Tillywater to his two daughters, jointly and to their heirs. Isabella died at Tillywater on 4th April 1906 aged 52 and is buried in Monymusk Churchyard with her husband. Isabella had one son, William Morgan who settled in Kelso, Saskatchewan Canada and died there on 25 November 1920. Following William's death his only son Walter William Morgan was eventually named as nearest lawful heir to Mrs Isabella Paterson or Morgan and was granted her half share which he assigned to William Ritchie, farmer, Bogfur, Kemnay.
Mary Paterson or Gill died on 27 August 1928 and her half share of Tillywater passed to her children, James and Mary Jane who at that time were staying at Hamewith, Sauchen. James died on 5th August 1952 and his quarter share passed to his sister who was by then staying at Dunniekier, Church Lane, Kemnay.
In July 1956 both William Ritchie and Mary Jane Gill renounced their interest in the building lease in favour of the trustees of the late Arthur Moubray Burnett on the understanding that a feu charter be granted to James Bruce Law, accountant of Tillywater Cottage, Kemnay who had agreed to buy the two half shares. James Bruce Law was the grandson of James Bruce, one of the earliest tenants of Tillywater and the property is now owned by his late wife's nephew.
During the 1960s the top area of the house was made into one flat and remained leased for some time, but the property has now been made into one dwelling house.