Real Estate

Should one buy a home that has significant renovations done to it without any permits obtained from the city?

  • Last Updated:
  • Jul 16th, 2021 4:42 pm
[OP]
Newbie
Jul 4, 2012
85 posts
76 upvotes
Toronto

Should one buy a home that has significant renovations done to it without any permits obtained from the city?

The home in question was sold a couple of years ago for $850k. Recently about $350k-400k worth of renovations were done to the home and it is now listed for $2m.

When I asked the listing agent if required renovation permits/approvals were obtained from the city, he gave a vague response. I checked with the city, and they confirmed that no permits were issued in the last 20 years on this property. I'm worried that there are significant changes done to the property and the new owner may have to deal with the city in case if any issues come up later.

Some of the changes include a new basement apartment, a staircase going to the basement through the garage, a new terrace, an extension of the family room to cover the porch, etc.

Would be interested in learning from you guys if I am being over cautious or renovations without permits are common? Thank you in advance!
34 replies
Deal Addict
Jan 19, 2008
1633 posts
1488 upvotes
Etobicoke
I would pass. It's not worth the hassle. ....and a basement apartment in a $2 000 000 home?
Deal Fanatic
Jul 3, 2011
6517 posts
3796 upvotes
Thornhill
The answer is no! It is simply no!

Any other answer has zero merit! None!

This is my most recent encounter with this - less than 2 weeks ago.

Showed client a very nice renovation. The work that we are able to critique, tiling, wood floors, paint, wallpapering was done well,

The work that we knew took place but were left wanting an answer on was some electrical and plumbing not connected especially for appliances and all faucets and toilets, landscaping grading

The work we knew took place that required permits but were done without permits was removal of walls, new plumbing and electrical work.

Already knowing the currently available answer, I enquired of the agent if the property was renovated under permits, if there was an occupancy permit granted and if there are any outstanding permits. I also wanted to know if at closing they intended to complete the work

As long as I have been in this business I am still shocked to learn there are so many agents who are either wilfully ignorant or they're just being sleezeballs, Yesterday was yet another of those days but I digress. The listing dude above promotes himself as someone who is adept at finding investment properties for his clients, showing them how to renovate and make big bucks and he is well known.

His answer to me was literally, 'no nothing was done to require permits.'

So I sent him his video showing where he said walls were torn down, new plumbing and electrical was put in place and a copy of his city's by-laws.

This weekend I showed another of his which we discovered is an even worse disaster,

Moral of the story, some buyers will be dazzled by the work, taken in by the ignorance of the representatives or bamboozled by sheisters.

It doesn't matter how much you love the property or that you got the answer you wanted to hear, or how well known they are, don't be the one in 10 who ends up in court suing for 10s even 100s of thousands in repair costs.


If your gut is signalling something - listen to your damn gut!
[OP]
Newbie
Jul 4, 2012
85 posts
76 upvotes
Toronto
Thanks for your response.

The same story with this home - the most elegant and tasteful renovations were done to the property. Everything in the house is the best of the best. I am so surprised that they did so much but obtained no permits. If permits were expensive, they could have cut down on a couple of extravagant/unnecessary upgrades and the house would have still looked amazing.

The offer was presented with the following condition "The seller agrees and warrants that all additions, repairs, upgrades and remodeling to both the interior and exterior of the property are in compliance and made in accordance with the provincial and municipal building and fire codes, by-laws, and meets the required permit and zoning requirements". Goes without saying, they did not accept it Face With Stuck-out Tongue And Tightly-closed Eyes.
licenced wrote: The answer is no! It is simply no!

Any other answer has zero merit! None!

This is my most recent encounter with this - less than 2 weeks ago.

Showed client a very nice renovation. The work that we are able to critique, tiling, wood floors, paint, wallpapering was done well,

The work that we knew took place but were left wanting an answer on was some electrical and plumbing not connected especially for appliances and all faucets and toilets, landscaping grading

The work we knew took place that required permits but were done without permits was removal of walls, new plumbing and electrical work.

Already knowing the currently available answer, I enquired of the agent if the property was renovated under permits, if there was an occupancy permit granted and if there are any outstanding permits. I also wanted to know if at closing they intended to complete the work

As long as I have been in this business I am still shocked to learn there are so many agents who are either wilfully ignorant or they're just being sleezeballs, Yesterday was yet another of those days but I digress. The listing dude above promotes himself as someone who is adept at finding investment properties for his clients, showing them how to renovate and make big bucks and he is well known.

His answer to me was literally, 'no nothing was done to require permits.'

So I sent him his video showing where he said walls were torn down, new plumbing and electrical was put in place and a copy of his city's by-laws.

This weekend I showed another of his which we discovered is an even worse disaster,

Moral of the story, some buyers will be dazzled by the work, taken in by the ignorance of the representatives or bamboozled by sheisters. tr

It doesn't matter how much you love the property or that you got the answer you wanted to hear, or how well known they are, don't be the one in 10 who ends up in court suing for 10s even 100s of thousands in repair costs.


If your gut is signalling something - listen to your damn gut!
Deal Fanatic
Jul 3, 2011
6517 posts
3796 upvotes
Thornhill
And that clause is not worth much to the buyer. Sorry to inform you.

It's liteweight.
snkhan wrote: Thanks for your response.

The same story with this home - the most elegant and tasteful renovations were done to the property. Everything in the house is the best of the best. I am so surprised that they did so much but obtained no permits. If permits were expensive, they could have cut down on a couple of extravagant/unnecessary upgrades and the house would have still looked amazing.

The offer was presented with the following condition "The seller agrees and warrants that all additions, repairs, upgrades and remodeling to both the interior and exterior of the property are in compliance and made in accordance with the provincial and municipal building and fire codes, by-laws, and meets the required permit and zoning requirements". Goes without saying, they did not accept it Face With Stuck-out Tongue And Tightly-closed Eyes.
Deal Addict
Feb 19, 2019
2100 posts
3447 upvotes
Stouffville ON
Renovations without permits are common unfortunately.
Doing extensive renovations without permits is idiotic on so many levels, in this case it cost them one potential buyer but the list is very long.
Full Time and Full Service Realtor
Deal Addict
Mar 2, 2017
3626 posts
7119 upvotes
Toronto/Markham
senasena wrote: Renovations without permits are common unfortunately.
Doing extensive renovations without permits is idiotic on so many levels, in this case it cost them one potential buyer but the list is very long.
Pretty much, especially with older homes this is inevitable in many cases.

I wouldn't draw a hard line in the sand on what to do here, I think there are situations where on a risk adjusted basis it can be safe to proceed. It really comes down on what was done, without context it's impossible to give an answer. Are we talking about landscaping and cosmetic mods or are we running new gas lines, running new homeruns to electrical, etc?

It's also fairly uncommon to do a large renovation without a permit, the municipalities are pretty diligent at keeping tabs on all work happening (at least most of the GTA) Not many are stupid enough to sink in hundreds of thousands at the risk of having to rip it out.

CN: it's case by case.
RE Broker
Deal Addict
Mar 2, 2017
3626 posts
7119 upvotes
Toronto/Markham
snkhan wrote: Recently about $350k-400k worth of renovations were done to the home and it is now listed for $2m.


Who came up with the value of the renovations (350k-400k)?

What was done?

What is "significant"?

Are you guessing? Was it in the listing? Remember, "350k of renos" listed in the client remarks is a fudged number, you'd be lucky if it was even half that, just more half truths and shilling happening by the seller.

I've walked in flips that claim 200k in renos on the listing when I know for a fact it was 80k or so having direct knowledge of the flip. Some are even less filled with kijiji and ReStore left over materials.

Buying flips is literally the worst, almost always garbage in garbage out.
RE Broker
[OP]
Newbie
Jul 4, 2012
85 posts
76 upvotes
Toronto
I agree the renovation cost is a bit inflated. In their defense, I can tell that the renovations are done professionally (by "professionals" who did an impressive job but were willing to do it without permits!!!) and not a patch job through different contractors.

Regarding what is significant - basically, they left the surrounding walls and foundation intact of this 50yr old home (likely never touched before) and replaced everything else with high-quality stuff. At least what we can tell they re-did floors, ceiling, roof, staircase, 5 bathrooms, chef-kitchen, landscaping, covered porch to extend the family room, terrace above garage, staircase inside the garage, doors, windows, ceiling, multiple appliances, new electrical, separate basement unit, etc.).

The renovation/design seems to be copied from another property in the area that was flipped a year ago for $1.85M. Interestingly I asked the city and was told no permits were obtained on the $1.85M property either.

Thanks for your feedback.
RichmondCA wrote: Who came up with the value of the renovations (350k-400k)?

What was done?

What is "significant"?

Are you guessing? Was it in the listing? Remember, "350k of renos" listed in the client remarks is a fudged number, you'd be lucky if it was even half that, just more half truths and shilling happening by the seller.

I've walked in flips that claim 200k in renos on the listing when I know for a fact it was 80k or so having direct knowledge of the flip. Some are even less filled with kijiji and ReStore left over materials.

Buying flips is literally the worst, almost always garbage in garbage out.
Deal Fanatic
Jan 15, 2017
5542 posts
5789 upvotes
Ottawa
I would draw a hard line. No permits, no offer.

Permits do not add a substantial cost to a renovation. A permit ensures that the work is up to code. Permits protect the buyer, the seller, and everyone in the community. Homes cost so much now why would anyone take the risk of buying anything without the proper permits?
Deal Addict
Jun 13, 2009
1173 posts
927 upvotes
Toronto
xxxray wrote: I would pass. It's not worth the hassle. ....and a basement apartment in a $2 000 000 home?
Ya, 2 mil means you can afford not to do manual labour. The basement apt. could be used as a nanny suite.
Deal Addict
Dec 5, 2009
2561 posts
2983 upvotes
Where I draw the line is when renovations involve changing electrical/plumbing/structural elements. A permit is such a small % of the overall cost, which makes me question the quality of the work (particularly what you don’t see). Permits can take a while, so they were possibly trying to rush through the renovation, which again, makes me question the quality.
Deal Addict
May 23, 2006
1662 posts
671 upvotes
Vancouver
The fact that there is no permit might very well be because they are aware of some areas not up to code, and it is difficult or costly to bring those areas up to code (e.g. plumbing, insulation, or electricity system). It is likely in areas that you cannot see.

It is fairly common for minor areas not up to code. For example, sheds are built on right of way, garden infrastructure not following set back requirements.....but like others said, if you are doing a major renovation, it makes sense to get a permit.
Deal Addict
Nov 13, 2013
4209 posts
3359 upvotes
Ottawa
Agree it is a total red flag. But everything for a price. If market there is slowing and you can get a "deal" it could be worthwhile.
Deal Expert
May 30, 2005
48549 posts
9625 upvotes
Richmond Hill
skeet50 wrote: I would draw a hard line. No permits, no offer.

Permits do not add a substantial cost to a renovation. A permit ensures that the work is up to code. Permits protect the buyer, the seller, and everyone in the community. Homes cost so much now why would anyone take the risk of buying anything without the proper permits?
Most of the time it's not the cost, but rather the turnaround involved. Getting permits can easily double the amount of time it takes to finish a job, end to end, with most of it waiting for paperwork to be done.
Sr. Member
Oct 6, 2020
640 posts
1040 upvotes
When we reno'd our home in Oakville 5 years ago (full gut job), we got permits...and it honestly added like 3-4 months to the whole process...

It was ridiculous...waiting...and more waiting, and then waiting some more...and then changing crap that literally does not even matter just to be "code"....silly.... (example...we did glass staircase and the railing was like 6 inches short bc of "code"....well, temporarily adding a 6 inch piece of wood to the end of the railing was enough to "pass"...and then we just removed it..and the inspector was even fine with that LOL)...that in itself took 3 visits from the useless inspector and about 3 weeks of waiting...

If/when we reno again, 100% doing it without permits.
Deal Fanatic
Jul 3, 2011
6517 posts
3796 upvotes
Thornhill
Extensive renovations involving the removing of walls, addition of or moving plumbing and electrical is not anything to dismiss. People buy cars demanding it pass tests yet are happy to poopoo the largest investment of thir life.

Update on that property I mentioned - it failed inspection.
Deal Addict
Mar 2, 2017
3626 posts
7119 upvotes
Toronto/Markham
licenced wrote: Extensive renovations involving the removing of walls, addition of or moving plumbing and electrical is not anything to dismiss. People buy cars demanding it pass tests yet are happy to poopoo the largest investment of thir life.

Update on that property I mentioned - it failed inspection.
Yep, would deem this pretty significant.
RE Broker
Deal Addict
Mar 30, 2017
1217 posts
977 upvotes
GVA
teedomo88 wrote: When we reno'd our home in Oakville 5 years ago (full gut job), we got permits...and it honestly added like 3-4 months to the whole process...

It was ridiculous...waiting...and more waiting, and then waiting some more...and then changing crap that literally does not even matter just to be "code"....silly.... (example...we did glass staircase and the railing was like 6 inches short bc of "code"....well, temporarily adding a 6 inch piece of wood to the end of the railing was enough to "pass"...and then we just removed it..and the inspector was even fine with that LOL)...that in itself took 3 visits from the useless inspector and about 3 weeks of waiting...

If/when we reno again, 100% doing it without permits.
12-24 months delay in Vancouver
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