What Home Buyers Should Know About Open Permits

While they’re required for the construction and demolition of buildings, permits aren’t just for developers. There are many instances when homeowners need them to perform renovations—and they’re required to “close” them once the work is finished. What many buyers don’t know is that having an open permit associated with the home they purchase could have consequences. Fortunately, if you’re on the hunt for the perfect piece of property, there are steps you can take to protect yourself.

If you’re uncertain about how open permits could impact you as a home buyer, here’s what you should know…

Looking to buy or sell in West Toronto? Our strategic advisory services can help you exceed your market objectives. Call us at 416.441.2888 or reach us by email at evan@christensengroup.ca.

What are building permits?

The City of Toronto issues building permits to homeowners who want to make a major renovation or addition to their property. This process ensures that any work completed is in keeping with municipal building codes and zoning bylaws. Once a permit is filed and granted, the construction that it covers must be assessed by city inspectors before it can be closed.

Of course, homeowners don’t always carry out their renovations legally. Some don’t bother to acquire a permit beforehand, and others leave them open without completing the process. Both scenarios can have negative implications for any buyer who might buy their property down the line. If you’re looking at resale homes, here are the hazards you should keep in mind.

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The potential risks

It’s important to note that just because a renovation didn’t go through the formal permit application and inspection process doesn’t necessarily mean that it’s of poor quality. That said, there are some potential hazards associated with buying a home with this history.

First off, construction performed without the proper permit hasn’t met the city’s safety and legal standards. While it’s possible to buy a home that hasn’t gone through this process without experiencing negative consequences, being certain that all renovations were aboveboard can provide significant peace of mind.

You should also be aware that this issue isn’t just about safety and construction quality. Unpermitted construction and open permits can have a legal impact on buyers, since they become the purchaser’s responsibility once ownership changes hands. Worst-case scenario, the municipality could hold you liable for bringing any deficiencies up to code.

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What to do if you’re concerned

As a buyer, there are steps you can take to protect yourself from the consequences of home renovations done without proper permits.

If you’re concerned about unpermitted construction, you may want to consider having any property you’re thinking of buying inspected. You can include a condition within your offer that makes your purchase contingent on a successful result. The downside of this approach is that in multiple-offer scenarios, sellers may favour buyers who don’t make these types of requests. An experienced agent can help you understand the pros and cons of including conditions.

When it comes to open permits, potential issues are often uncovered by real estate lawyers during the title search phase. However, you can also perform your own status check with the city. Your agent can take this step for you to help ensure that there are no active permits on record.

Be aware that your title insurance may provide some protection if you buy a home and experience negative consequences due to work done without permits. To learn more, talk to your lawyer about your coverage.

There are few absolute guarantees in real estate, but there are ways to make buying a home a lower-risk endeavour. Whether you’re worried about open permits or other potential obstacles, your best course of action is to work with an experienced agent who has a track record of success.

Looking to buy or sell in West Toronto? Our strategic advisory services can help you exceed your market objectives. Call us at 416.441.2888 or reach us by email at evan@christensengroup.ca.