In Ontario, permits are a crucial aspect of property purchases, especially if you plan to renovate, build, or make other significant changes to your new property. Understanding how permits can affect your property purchase is important for both buyers and investors to avoid unexpected costs, delays, or legal issues down the road. Whether you are located in Toronto, Vaughan or Mississauga, permits are incredibly important.

Here’s an in-depth look at how permits can influence your property purchase in Ontario:
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1. Property Inspections and Permits

Before purchasing a property, it’s important to research whether the existing structures or renovations on the property have the proper permits. This is especially true if the seller has done any modifications or improvements. If renovations were made without permits, you may be liable for retroactively obtaining permits and even having to bring the work up to code, which can be both costly and time-consuming.

What to Look For:
• Unpermitted Renovations: Sellers may make improvements to a property without obtaining the necessary permits. Common examples include additions, basement suites, electrical work, plumbing changes, or even something as simple as adding a deck or installing a pool. If these were done without permits, you may face fines or be required to make repairs to meet current building codes.
• Home Inspections: When buying a property, it’s essential to hire a qualified home inspector who can assess whether all work on the property was properly permitted. This inspection can identify potential issues related to non-permitted work.
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2. Zoning and Land Use Permits

In Ontario, the zoning laws of a property can affect how you can use the land or what kind of structures you can build on it. Zoning bylaws are established by municipalities like Toronto to control land use and ensure that land development aligns with the surrounding community’s needs.

How Zoning Affects Property Purchases:
• Building Restrictions: Zoning permits dictate what types of structures you can build on a property. For example, some residential areas may have strict zoning that prohibits the construction of multi-unit buildings or commercial developments. If your plans for a property involve changing its use (e.g., converting a house into a multi-unit rental property), you may need to apply for a zoning variance or rezoning.
• Use of Land: Zoning can also determine whether a piece of land can be used for specific purposes, such as agriculture, commercial activity, or residential use. Make sure to review the zoning bylaws in the municipality where the property is located to ensure it aligns with your intended use.
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3. Building Permits for Renovations

If you plan to make renovations to your newly purchased property, building permits are almost always required. These permits are issued by local municipal governments like Toronto or Vaughan, to ensure that your renovations comply with Ontario’s building code, local bylaws, and safety standards.

When Building Permits Are Needed:
• Major Structural Changes: If you’re knocking down walls, adding new rooms, or extending the footprint of your house, you’ll need a building permit.
• Electrical, Plumbing, and HVAC Work: Any significant work related to plumbing, electrical wiring, or heating and air conditioning systems typically requires permits. If these areas are not up to code, they could be dangerous and lead to costly repairs.
• Unpermitted Work: If the previous owner did any major work without the proper permits, it can complicate your future plans for renovation or expansion. You may be required to undo the work and redo it with permits in place.
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4. Property Taxes and Permits

Certain improvements to your property, such as adding a second story or building a garage, can affect your property tax assessment. In some cases, municipalities like Toronto may assess your property at a higher value if they find that renovations or additions have been made without permits.
• Unpermitted Work and Tax Assessment: If a property has unpermitted work, this could lead to discrepancies in the property tax assessment when discovered. Municipalities may retroactively adjust the assessment, leading to back taxes or increased property taxes.
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5. Delays and Costs Associated with Permits

Not all permits are immediately available, and some applications may involve lengthy approval processes. If your property purchase hinges on your ability to complete renovations or development work, permit delays can affect your timeline and plans.

Costs and Time Delays:
• Permit Application Fees: Applying for permits comes with a fee, which can vary depending on the type of work. These fees add an extra cost to your renovation project.
• Approval Process: Some permits, especially for large-scale projects, can take months to be approved. For example, building permits in Ontario are typically processed within 10 business days for simple projects, but more complex or large-scale projects can take longer.
• Time-Sensitive Plans: If you are on a tight timeline (for example, if you need to move into your home by a certain date), delays in obtaining permits could impact your ability to complete the renovation or construction on time.
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6. Heritage and Conservation Permits

In some areas, especially in historic or heritage-designated neighborhoods like Cabbagetown in Toronto, you may need additional permits before undertaking renovations. These permits ensure that any changes you make are in line with the character and aesthetic of the surrounding area.

Heritage Considerations:
• Designated Properties: If the property you’re considering is designated as a heritage building, you may be limited in how you can alter the property. Municipalities and heritage conservation organizations often impose restrictions on changes to the exterior or even the interior.
• Conservation Areas: If the property is located within a conservation area, you might also require a conservation permit to ensure the environment is protected during construction or renovation.
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7. Risks of Not Checking Permits Before Purchase

Failing to thoroughly investigate the permit history of a property can lead to unexpected costs and legal issues after your purchase.

Risks Include:
• Financial Penalties: If unpermitted work is discovered, you may face fines or be required to bring the property up to code, which can be very costly.
• Loss of Insurance: If unpermitted work is found, your insurance coverage could be affected. For example, if a problem arises from unpermitted work, the insurance company may refuse to cover the costs.
• Difficulty in Reselling: When you try to resell the property, unpermitted work may scare off buyers, and you may have trouble selling the home until the work is properly documented and brought into compliance with building codes.
• Legal Issues: In some cases, failure to comply with municipal bylaws can lead to legal battles, further complicating the process and leading to even more financial costs.
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In Ontario, permits are a crucial part of the property purchase process, especially if you’re planning to renovate, build, or change the property in any way. Checking the permit history of a property can help you avoid unexpected costs, delays, and legal headaches after the purchase. Whether it’s to ensure proper zoning compliance, validate unpermitted renovations, or obtain the proper building permits, understanding how permits work and ensuring that everything is in order can save you time, money, and stress in the long run.

Always consult with a real estate professional, inspector, or lawyer to make sure that you fully understand the permit requirements for the property you’re purchasing. Whether you are located in Toronto, Vaughan or any other area in Ontario, the importance of permits cannot be stressed enough.

Call Capulli Law LLP if you have any questions regarding permits – we are always happy to help.