What Buyers and Sellers Need to Know About Unpermitted Work
Whether you're buying or selling a home, unpermitted work can present significant challenges if not addressed proactively. Unpermitted work refers to any renovations or modifications made to a home without obtaining the necessary municipal building permits. Here's what you need to know:
For Sellers: Disclosure is Key
When selling a property, full disclosure is crucial. As the listing brokerage, it's your responsibility to disclose all known material latent defects, which include any unpermitted work lacking appropriate municipal building permits.
Best Practice: Before listing a property, it's advisable to pull building permits to identify any unpermitted work and disclose it accordingly. Having these permits readily available can build buyer confidence and facilitate a smoother transaction. Although your listing brokerage can conduct this search, discussing it with your client beforehand is essential, as uncovering unpermitted work could potentially impact the property's value.
For Buyers: Understanding the Risks
If you're considering purchasing a home, it's vital to be aware of any unpermitted work and the associated risks. Some key concerns include:
- Impact on Future Renovations:** Unpermitted work can complicate future renovation plans, as existing issues may need to be addressed first.
- Legal and Financial Responsibility:** Once you purchase the home, you assume responsibility for any unpermitted work, including the obligation to disclose it when you sell.
- Insurance Limitations:** Most home insurance policies do not cover unpermitted work, leaving you vulnerable to unforeseen repair costs.
To protect yourself, always request to review the building permit files. If the current owner is not the original one, permits may need to be obtained from the local municipality or regional district. It's wise to understand the rules regarding permit access in your area, as some jurisdictions allow only the seller or selling brokerage to retrieve them.
If unpermitted work is disclosed in writing, it will likely be reflected in the home's asking price. If it's discovered later, this may provide room for negotiation. However, even with a price adjustment, you should carefully weigh whether you're comfortable taking on the associated risks and costs. In some cases, negotiating with the seller to rectify the issue may be the best course of action.
Considering Renovations? Get the Right Permits
For those planning to renovate, obtaining the necessary permits is essential to avoid future complications. Hiring a professional contractor who understands local building codes and permitting requirements can help ensure compliance. A great resource for finding qualified contractors is the **Canadian Home Builders' Association**, which provides valuable insights into the renovation process and contractor selection.
By staying informed and proactive, you can navigate unpermitted work issues with confidence, whether you're buying or selling a home.
