The Reality of Home Renovations: TitlePlus/LAWPRO

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The importance of building permits to those renovating and to those buying renovated homes

TORONTO, Sept. 13, 2010 – Home renovations are taking place in Canadian homes on a daily basis and at a remarkable speed. Reality television may leave homeowners with the impression that a kitchen can be gutted between commercial breaks, a wall insulated in moments and an exterior addition completed within the hour. Adding value to the sale of your home or simply adding to the enjoyment of your own home is not a new phenomenon for Canadians. However, the lightning speed of these “reality” renovations can mislead the average homeowner in their own renovation plans and leave behind costs that exceed the home’s renovated value.

“Many Canadians consider renovations to increase the value of their property for a sale or immediately after a new home purchase,” says Ray Leclair, an experienced real estate lawyer and vice-president of the TitlePLUS program at Lawyers’ Professional Indemnity Company (LawPRO). “It may be tempting to immediately start tearing down or building up, however, homeowners need to tread carefully, and be sure that they are legally protected with building permits or their reality could be costly.”

While it likely comes as no shock to homeowners that the big jobs (for example, structural changes to a home) need building permits, it may be surprising for some to learn that many of the smaller jobs (such as finishing basements, updating plumbing or electrical equipment, or even adding a wood burning stove) may require permits as well.

Recent statistics released by the Canadian Mortgage and Housing Corporation revealed that 45 per cent of households intend to do some form of maintenance and repairs, while 78 per cent will undertake alterations and improvements. Sixty-eight per cent of households who intend to renovate this year, will do so to update, add value, or prepare to sell their home.

“A dream home purchase can turn into a nightmare if you do not acquire the proper permits or if renovations were done by a previous owner without a permit,” adds Leclair. “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 – the first step any would-be renovator should take is to speak to their real estate lawyer to ensure that the work they have planned is compliant with municipal codes.”

What options are available for people in this situation?

Leclair is available to discuss the above, or other common questions homeowners and homebuyers may have about the legal aspects of doing renovations around the home. Some examples include:

  • When do municipalities usually require permits?
  • What are the risks of doing work without a permit?
  • What are the legal options for buyers of homes where work has been done without a permit?
  • Can sellers be held responsible if a home has had work done without a permit?
  • How can homeowners and home buyers protect themselves?

To help homeowners avoid disappointments, delays or unpleasant surprises, Leclair suggests consulting an experienced real estate lawyer. Another useful resource is the TitlePLUS Real Simple Real Estate Guide, a website with information on what real estate lawyers do, as well as a mortgage calculator, a locate-a-lawyer feature and other tools. It is available free at titleplus.ca.

About LAWPRO and TitlePLUS title Insurance

TitlePLUS title insurance is provided across Canada by Lawyers’ Professional Indemnity Company (LawPRO), a licensed insurer.

TitlePLUS title insurance is the only all-Canadian title insurance product on the market today. It protects home buyers and mortgage lenders under the same policy (and for the same premium) from title-related and other problems that could affect ownership or the marketability of the property, and covers the legal services1 provided by the lawyer who acts for the purchaser and lender. www.lawpro.ca