Posted by: Daryl & Wendy Ashby | December 28, 2010

Illegal Improvements

When trawling home listings, many ads boast of recent upgrades and renovations. Before you marvel at that new addition, be sure the vendor obtained the permits for the work.

Each municipality has its own permit requirements, but if it affects structure or is a safety issue, then a permit will likely be required.

“Anything within the building where load-bearing walls are changed [requires a permit] as do new openings on the exterior or a change to the size of doors or windows,” says Ann Borooah, the chief building official for the City of Toronto. “Building a garage, balcony, deck or any addition of that nature also needs a permit.”

You can apply for a compliance letter from the city, which will tell you if there are any outstanding open permits on the property, but not if the work was done without a permit.

“If there was never a permit applied for and we have no record of non-compliance, that will not come up on our records,” Ms. Borooah says.

“When you’re looking to buy a home, check to see if there has been any new work [done on it],” says Ray Leclair, real estate lawyer and vice-president, Title Plus at Law Pro in Toronto. “The easiest thing for purchasers to do is to ask the vendor: ‘Do you have a copy of the permit? Do you have a copy of the plans that were submitted?’ If you don’t have any of those documents, it probably wasn’t done with the building permit and may not be up to standard.”

If you buy a place where work has been done without permits, and this comes to light when you apply to do your own renovations, you will be on the hook for making the old renovations compliant.

A client of Mr. Leclair applied to put a deck over an existing addition.

“The City asked, ‘How are you hanging the deck?’ Their architect said, ‘It sits on top of the addition,’ The city said, ‘What addition?’” Mr. Leclair says. The client had to tear down the entire addition, which was found to be sitting on a disused swimming pool and rebuild from scratch.

Ms. Borooah says that many buyers are opting for title insurance to cover them against such risks.

“We’ve seen a trend away from asking for compliance letters because of title insurance being introduced,” Ms. Borooah says. “Instead of doing title searches or requesting records from municipalities, applicants obtain title insurance and then it’s guaranteed.”

Mr. Leclair says he has seen a significant rise in claims over permit issues.

“Building compliance issues represent the second largest number of claims that we receive in the Title Plus program — 25% of the number of claims,” he says. “But they account for 33% of the cost that we’ve had up to date, and that cost is growing.”


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s


%d bloggers like this: