If you have been looking for a detached house in Vancouver, I’m sure you’ve come across a variety of unauthorized work done in homes in addition to unauthorized basement suites. It’s all too common, especially for old detached homes, but there are still some risks involved. Ideally you want to buy a property that has all renovations done with proper permits, but, aside from new properties, they can be few and far between. There are a handful of considerations to make, and it all depends on your risk tolerance. Here are a few things to consider:
- What was done without permits, and who did the work?
Does the Sellers have pristine records of the home before, during and after the renovation? Did the Seller use licensed trades, who renovated to current building code, with records of what was done? Was the work done recently or many years ago? Did the renovations significantly change the floor plan? Were you hoping to get permits for future renovations you’d like to do? If you had to remove the renovations, would you still like the property?
If the home already has work done without permits, you will want to think twice about getting permits for future work. If the City comes into the home and discovers the work done without permits, they will fine you and ask you to re-renovate to ensure the work is done to code. If the renovations had significantly changed the floor plan, it will be a lot more expensive for you to re-renovate and you might end up with a much different home than you thought you had, so consider how much you would like the home if it were similar to it’s original floor plan.
In the case of an unauthorized basement suite, you may be required to remove the basement suite (i.e. the kitchen and perhaps the bathroom) thus losing the rental income you need to make your mortgage payments. Removing renovations, or re-renovating, can be costly and time consuming. It is possible to get permits for work that has already been completed, but it’s difficult, and should not be relied upon.
- Are the renovations done in a Strata property?
Strata Bylaws require that renovations need both Strata Approval and proper City Permits. The Strata has to give you permission to do renovations before you get permits, so their approval is contingent on you following through with proper permits. If you do renovations without permits in a Strata property and the Strata finds out, the bylaws may allow the Strata to fine you and force you to remove the renovations or get the necessary permits.
I see a lot of condo renovations without permits. Everything from wall removal to open up kitchens, to the addition of in suite laundry, to added pot lights would require permits. Purchasing these units comes with risks because the renovations may not only affect your own unit, but can affect the common elements in the building. A few things to consider include when the work was done, if it was done to current building code, and if the Strata gave approval for the renovations. If the renovations don’t have strata approval on file then I would be concerned.
- Is the basement suite unauthorized?
If I had to guess, most basement suites are unauthorized. In order to get permission from the city for a legal basement suite, your suite needs to confirm to appropriate exits, ceilings heights, plumbing, electrical, smoke alarms, doors and more. Here’s some information from the City of Vancouver about Secondary Suite Requirements. If a suite is currently unauthorized (as in, the City has not permitted the suite to exist) then it is either extremely unlikely that you’ll be able to renovate the suite to be legal or could be quite costly (think, raising the house to raise the ceilings, digging down to add another exit, etc).
If you’re purchasing a home with an unauthorized basement suite, you need to understand the risks involved, which include forced removal of the suite (and thus, loss of your rental income) or forced renovations of the suite by the City of Vancouver. I have heard horror stories of the City discovering suites and forcing the owners to comply with the Bylaws. How does the City find out about these suites? It could be an angry tenant or nosy neighbour – something out of your control.
- Will this affect your home insurance?
Potentially. If there are any renovations done without permits and/or strata approval, make sure your home insurance policy will cover you in case these renovations end up causing a major issue. If you’re not insured for unauthorized renovations, your home insurance may not cover any damage caused because of these renovations. This could be especially costly if you live in a Strata – the Strata’s insurance may not cover damage caused by your un-permitted renovations, and the damage done in a Strata could be significant if it affects other units. Your home insurance may also not rebuild a an addition on your home in event of disaster if it was added without permits. Talk to a qualified insurance broker about these issues prior to purchasing the home so you understand what happens in the event of big or small problems.
- Does the Seller have to disclose the unauthorized renovations?
Yes, the Seller has to disclose (to the best of their knowledge) all renovations done without permits as this information is considered a “Materiel Latent Defect”, which is something that you may not discover with an inspection. However, not every Seller knows they have to disclose these details so make sure you ask for details about any renovations.
Getting permits does take quite a bit of time (it can take a couple weeks to a couple months to approve your project) and adds a small cost to the renovation, but if you’re starting from an original condition unit, get the permits. They come with instant added value and give Buyers a lot more confidence in your home when it’s time to sell. Note that if the property already has renovations done without permits, you want to tread carefully with getting permits on any further renovations – if the City comes in to see the renovations done without permits (even if you’re getting their approval fro something else) then they may make you re-renovate or remove the existing renos.
Interested in finding out if a home has any work done with permits? Give the City of Vancouver a call. They can check their records and tell you what they have on file. The City of Vancouver also has a Permit Search tool, though it only goes back to 2016 or so. For any older renovations, you’ll want to call, email or chat with a representative on their website.