This post was included in the Canadian Finance Carnival #5
With the explosion of DIY renovation shows on television and the convenience of Home Depot, renovating one’s home has become so easy that no one thinks twice about doing it. However, think twice you should. As, in the following interview you will find out the that renovations involving finishing basements, updating plumbing or electrical equipment, or even adding a wood burning stove may require building permits issued your municipality. Furthermore, if the renovations were done by a previous owner without a permit, “the municipality may force you to remove walls, ceilings, cabinets and other finishes so that an inspector can determine if the work complies with the building requirements or in the worst case, remove the improvement entirely” says our interviewee.
Piqued your interest have we? If we have, read on to find out when municipalities usually require permits, what the risks are of doing work without a permit, how does one go about securing a permit and more.
Biography: Ray Leclair is an experienced real estate lawyer & Vice President of the TitlePLUS program at Lawyers’ Professional Indemnity Company (LAWPRO). TitlePLUS title insurance is provided across Canada by Lawyers’ Professional Indemnity Company (LawPRO), a licensed insurer.
Q: When do municipalities usually require permits?
A: Big jobs, structural changes to a home for example, need a building permit. Also, many smaller jobs may require permits too (e.g., finishing basements, updating plumbing or electrical equipment, or adding a wood burning stove).
In Ontario, the following renovations generally require permits:
• construction of accessory buildings with an area of more than 10 square metres (107.64 square feet);
• construction of an addition to an existing building;
• construction of attached or detached garages;
• structural alterations;
• excavating, repairing or underpinning a foundation;
• heating, ventilating, air conditioning, plumbing or electrical work;
• construction of one or more new separate dwelling units within a building;
• finishing previously unfinished spaces within a building;
• new entrances or windows, changes to the size of entrances or windows or closing entrances or windows;
• construction of chimneys or fireplaces;
• installation of swimming pool enclosures;
• construction of detached decks more than 60.96 centimetres (24 inches) above ground or any deck attached to a building; and
• demolition or relocation of all or part of a building.
In Ontario, the following renovations generally do not require permits:
• replacement of stucco, siding or shingles with the same material;
• replacement of doors or windows when the opening is not altered;
• construction of fences (other than pool enclosure fences);
• patching, painting and decorating; and
• installation of cabinets or shelves.
Q: What are the risks of doing work without a permit?
A: A home can turn into a costly nightmare if you do not acquire the proper permits or if renovations were done by a previous owner without a permit.
Here are some specifics:
• The municipality may force homeowners to remove walls, ceilings, cabinets and other finishes so that an inspector can determine if the work complies with the Building Code.
• Renovations in progress can be delayed or stopped completely.
• If the work does not comply with the Building Code, the municipality can order the homeowner to bring the home up to Code or to remove the work and if the homeowner fails to do so, the municipality can bring legal action against them.
• Trying to obtain a permit and confirmation of compliance after the work has been completed can be problematic for inspections but more importantly for the standards applied; as inspectors will evaluate the work based on current requirements which may have changed and become more stringent over the years.
Q: How does one go about securing a permit (also how long does it take to get one)?
A: Homeowners, or their contractors, should apply for appropriate permits with the municipality. Both the forms required and how long it will take to process the forms vary depending on what type of permit is needed, the municipality, the work to be undertaken and the time of year the application is presented.
Q: What are the legal options for buyers of homes where work has been done without a permit?
A: If the buyer has not yet closed the purchase of the home, they can ask their Real Estate lawyer to review the Agreement of Purchase & Sale and advise them of their options, which may include working with the municipality and the vendor to resolve the problem.
If the transaction has closed and the municipality advises the new owner of the home that it requires the property to be brought into compliance, the new owner can make a claim under their title insurance policy, they can try to sue the vendor, or they can pay to fix the problem themselves.
Q: Can sellers be held responsible if a home has had work done without a permit?
A: Generally, in real estate, it’s a case of buyer beware – i.e., sellers usually can’t be held responsible for work done to the home without a permit. On the closing of the transaction, the purchaser accepts everything that they’re getting. Exceptions may exist, but the new owner of the home needs to speak to a qualified real estate lawyer about the specific facts of their situation. But, purchasers should work with their qualified real estate lawyer to ensure that the appropriate clauses are added to the Agreement of Purchase & Sale before it is signed. Since the Agreement of Purchase & Sale sets out the contractual terms of the deal, it may be possible to add terms to hold the sellers responsible.
Q: How can homeowners and home buyers protect themselves?
A: Home buyers should:
• Get a written home inspection report done by a qualified home inspector.
• Ask vendors for copies of the plans and occupancy permits for the work that was done.
• Before signing the Agreement of Purchase & Sale, review the issue with an experienced real estate lawyer to ensure that the proper clauses are included in the Agreement for the purchasers’ protection.
• Ensure that the real estate lawyer does the necessary searches and / or
• Get a title insurance policy.
Home owners should ensure that they get the proper permits for renovations that they are doing to the home.
Thank You, Mr. Leclair!