One of the great hidden dangers of searching for properties is making sure the property you are buying is compliant with the building regulations.  There are innumerable bylaws and zoning regulations regarding what can be built, most of which are made and enforced municipally, and all of which are enforced inconsistently to the point of being capricious.  The purpose of this article is to let you know when you need to be concerned about possible building code violations, and what you can do about it.

Beware the Basement Income Unit

The most common renovation which can lead to all manner of violations of bylaw and building code violations is the construction of a basement income unit.  These are often sold as being ‘income potential’, and a way to increase the value of a property, when in fact they may be a huge problem.  Building an additional entrance to a property, renting it out as a separate unit, having a kitchen downstairs, all of these are things which require permits and an inspection to ensure compliance, and if these were not obtained, you could end up with an enormous bill to remedy any non-compliance later on.

The first thing you need to do is on considering any property which contains a basement unit is ask the seller, in writing, if permits for the basement unit were obtained when it was constructed.  If you get any answer other than ‘yes’, there is a problem.  You may wish to contact the building department yourself, to enquire about the property and see if permits were even requested for the work.  Doing this may trigger a building inspector to actually visit the property to determine if permits were required, and whether or not the work is compliant.  You should not be concerned about this happening, because this problem is going to need to be handled at some point, whether by the current Seller, or by some innocent buyer who does not think to ask about this.

The reason why things like this often get through transactions, where the lawyers involved clearly know that permits for such work are necessary, is that agents, who are my physically involved with the property, either do not know or do not care about the permitting issue, because it can get in the way of selling the property, so they ignore it.  Lawyers, not being involved with the property physically, will search for open work orders, but without knowing that substantial work was done on the property which would require a permit which was never obtained, will not know to ask for an inspection of the property so as to deal with any permitting issues and their cost as part of the purchase.

The last thing to consider when looking at properties with rental units is what the answers that sellers and their agents may give mean.  One of the things they like to say is that a unit is a ‘legal unit.’  What does that mean?  Were the permits obtained?  Was it inspected for compliance with the fire code?  Most likely what it means is that the neighborhood is zoned allowing for basement units, not that any specific permits were obtained.  What you need to do when asking about this is be forceful in demanding proper documentation.  If they got permits, they can provide copies.  If there was a final inspection to close the permits, there will be an inspection report they can provide.  If there was a fire inspection, there will be a report.  Demand all these things, without exception, and assume they do not exist if they are not provided.

No Renovation is Safe

While basement units are the most obvious source of problems, really any renovation or building project has the potential to become a problem by violating zoning or bylaws.  The fact is, the municipality can make a rule about just about anything they want.  Let’s say they make a rule that says a raised deck on the back of a property cannot be wider than the property and can extend no more than 2m away from the rear wall.  If the house you’re looking at has a deck which doesn’t meet those limits, the bylaws officer can come by and demand that you reduce the size of the deck to meet the bylaw, at your expense.  It doesn’t matter that the previous owners built it, or that it’s been there for 10 years without incident, it was against the rules the whole time, and now you have to pay to make your deck smaller.  Sometimes cities will have resources, such as this for the City of Mississauga for when permits are and are not required.  Not every municipality does this, so have a look if there are such resources when considering a property.

The result of this is that any modification to a property should result in you asking the seller whether or not what they’ve done complies with the relevant rules, and whether they ever had a permit or an inspection done to certify that.  If they have not, and in the vast majority of cases they won’t, you have to deal with the uncertainty.  This is not to say that you definitely will have a problem with a renovation because there was no permit.  The renovation or construction may be compliant, or you may never actually be inspected and have to remedy anything even if it is non-compliant.  This is the issue with building codes and zoning in Ontario, the enforcement is so inconsistent as to be less like law and more like the wrath of a capricious god: you never know when or where it’s going to fall, because it does so without good reason.

Conclusion

The main takeaway from this is that you need to get as much information as you can about what you are buying.  There is a thicket of different laws that intersect on home purchase and ownership, and compliance with building codes is one of those which get the least overview from lawyers, because they are so disconnected from the property itself.  You are well advised to ask about all works done on the property, whether permits were obtained, and whether permits were needed.  Sellers will often try to shrug these off, as they’re trying to sell a property and it may never have been a concern for them.  It may have even been work done by a previous owner and no inspector ever came.  Regardless, your duty to yourself is to obey the old rule: caveat emptor, let the buyer beware.  You have to look out for your own interests, and understand the risks you are taking with a significant purchase.