Watch out for legal quagmires when you buy newly built or renovated homes. Before you sign an agreement of purchase and sale, ensure previous owners had all the permits they required to make changes or additions to property you want.
Axess Law negotiates with sellers’ lawyers if construction or repairs are incomplete or occurred without the proper permits.
Why Get Building Permits
A building permit signals work on a property you plan to buy meets provincial building code standards and local zoning bylaws or laws like heritage homes (Ontario) renovations rules. It means the seller spent time and money required to do a job right. With permits taking anywhere from five to 11 weeks to obtain, it’s easy to see why some projects look rushed or poorly done.
What Happens if Permits are Missing
A new patio or central air system could be illegal if the property owner didn’t meet Ontario Building Code standards, local zoning bylaws or land use regulations.
You could face costly repair bills or inspection headaches if a building permit is missing or construction is incomplete. Since not all permits are not registered on a property title, potential legal problems may not be obvious at first glance.
An Axess Law real estate lawyer can check property titles for properties you purchase to protect you from potential backlash after you buy.
6 Mistakes Most Home Buyers Make
Think you are getting a deal by purchasing a resale home mid-renovation? Think again.
Your best-laid plans to take over a project yourself and complete it to your own high standards could go awry.
Building permits are issued for specific projects, based on drawings a previous owner submitted. Unless conditions on the permit’s face are met and the project passes inspection, the permit will stay open. Deviate from the plan and you may join home buyers who made these six common mistakes:
- Thought they could change the design without preparing new drawings.
- Relocated plumbing and electrical wiring to suit their new plan, without bylaw approval.
- Discovered Building Code requirements changed after the permit was issued.
- Remedied construction problems the seller created, at their own expense.
- Paid contractors for materials or labour the seller ordered to stop construction liens.
- Made DIY renovations that failed the construction inspection.
When Permits Are Needed
Municipal permits are necessary for:
Excavating or building foundations
Making home renovations, repairs or additions
Constructing new buildings over 10m2
Installing, upgrading or altering plumbing, wiring or on-site sewage systems
Adding mobile or other structures to property
Changing a building’s use, such as from residential to commercial
Erecting a seasonal building
Penalties for Improper Permits
Without the right permits in place, the seller could be fined up to $50,000 or in Toronto, a work without permit penalty.
As new owner, you may be:
- forced to tear down improperly or unpermitted work
- liable for costly repairs to city property a previous owner damaged
- billed for extra fees for environmental impact assessments
- or subjected to city inspections you did not know were required.
Protect Yourself from Open Permits
When you suspect a renovation, alteration or new construction has occurred, ask your realtor for the seller property information statement (SPIS). A missing or incomplete SPIS could be a red flag.
You have options if the seller failed to get proper permits or a permit is open and incomplete. Our real estate lawyers can negotiate for you. What does a real estate lawyer do (Ontario)?.
Before the Offer to Purchase
Axess Law reviews agreements of purchase and sale to find terms and conditions that could leave you stranded in a permit dispute. We write in clauses that protect your financial and legal interests — like requiring a satisfactory home inspection or SPIS before you commit to buying a resale home.
After You Sign an APS
If the agreement of purchase and sale is already signed, but the home inspection turns up trouble, our real estate lawyers talk to your sellers’ lawyer. Even if you had no legal advice before making a binding offer to purchase, we can often get a price reduction or require repairs to be completed before closing real estate transactions.
Before the Title Transfer
Property title transfers can reveal hidden flaws in home buying plans. Sellers are not legally required to register open building permits on property titles. But quick flips in rapid succession may be a sign a new property is deficient. We tell you if your property has changed hands repeatedly.
Good and Marketable Title Challenges
You may buy a property in good faith only to discover the title is marred by shoddy or incomplete construction work. Your losses could be substantial if a local building inspector imposes mandatory work orders on you. Axess Law has real estate lawyers near you who can ask the seller’s lawyer for title insurance (see what’s covered) for deficiencies you may be compelled to pay for.
Going Over the Property Line
Buying a resale home without figuring out where the property line is could compromise your purchase. Our licensed real estate lawyers show you how to get a surveyor’s real property report. It gives your new lot’s physical dimensions and location to prevent or support disputes over property line laws (Ontario). We help you write a legal affidavit for court if your neighbour argues construction you inherited goes over the line.
Financing and Resale Litigation
Mortgage lenders and future buyers may be reluctant to assume financial liability for a home you want to finance or sell when open permits exist. We refer you to our trusted legal partners if taking legal action against a seller is an option for you.
Get Low Flat Rate Legal Fees
Legal fees in the Greater Toronto Area and Ottawa can be hefty. Ask us about our low flat rate legal fees for real estate closures.
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