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The High Cost of Unpermitted Work Remediation

Posted by Ron Neal on Wednesday, November 28th, 2018 at 11:18am.

Think You Don't Need a Permit for Home Renovation? Think AgainIt may seem like unnecessary hassle and expense to secure a permit for home improvements or renovations, but any number of homeowners can testify that the cost and consequences of ignoring the requirements are higher.

Aside from the plight of inferior workmanship that sometimes is the hallmark of a job performed by a contractor who neglects to secure a proper permit and call for needed inspections, there are possible legal and financial consequences. Obtaining necessary plan reviews in order to secure a permit can add time delays and additional cost to a planned renovation or building project, but they should be considered a necessary part of the job.

For informational purposes only. Always consult with a licensed West Saanich real estate professional before proceeding with any real estate transaction.

Perils of Unpermitted Work

Without a permit, there might be little actual oversight of the construction. Even when it's complete, insurers may refuse to pay for claims resulting from problems associated with work that was performed without a permit. If damages are the result of shoddy workmanship or non-compliance with local codes, there might be little compensation available to the owner if no permit was issued. Homeowners in some parts of Canada may find that some recourse is available if they choose to file claims against those responsible. In Quebec and other provinces, liability for work defects extends to builders, architects, engineers, contractors, subcontractors and vendors for one year, but claims should be filed on a timely basis, and compensation is not assured.

Construction may be halted by local building officials until a permit is secured. If a stop order is executed, a worst-case scenario is that work already performed may have to be demolished or redone. A construction halt always adds time and additional cost to the job. The owner and contractor both may be subject to fine as well.

However, unpermitted work that is not detected until after completion or by a successive owner of the property, is a different matter and often the cause of more dire consequences. In some cases, unpermitted and uninspected additions are not counted in the home's total square footage, and are therefore not valued or assessed in the same way. Appraisers and lenders may actually penalize an owner for such renovations.

The Price of Non-Compliance

Occasionally, non-compliant work is only discovered at the time new improvements are planned. In some cases, if building officials have not signed off on previous work, owners may not be able to secure permits even for unrelated improvements or new construction until previous work is inspected and approved. In some cases, an owner may be charged a fine on top of the previously unpaid permit fee. The process can be time-consuming, arduous and expensive.

If the non-conforming work is discovered prior to a sale, a buyer may refuse to proceed with the contract, and the owner can be subject to penalties for non-disclosure in some cases. If there are health and safety issues, building officials may levy fines, require that permitting fees be paid and that previous work be brought into compliance, or even order demolition of non-compliant improvements.

Permits are required to assure that new construction and remodeling conforms to existing codes and standards. It is required not only for major renovations, but also for most projects that involve structural alteration, electrical and plumbing work, and sometimes for heating or cooling improvements. It is always recommended that the owner personally check with building officials prior to authorizing a contractor to begin any work. Reputable construction contractors will typically secure needed permits and call for required inspections, but it is always better to be an informed owner rather than a surprised client.

Statistics reveal that the existence of safety hazards is six times more likely with unlicensed and unpermitted work. That is a high risk to take, both for potential injury and the possibility of lawsuits or loss of insurance coverage.

Buying and Selling

Provincial regulations vary, but occasionally non-permitted work may be acceptable upon full disclosure and inspection. In such instances, however, there may still be legal ramifications, and it is unusual that such improvements will be valued as highly as fully permitted work.

Although it is estimated that up to 70 percent of home improvement work is undertaken without a permit, the recipe for disaster is clear in those instances, according to building industry spokespersons. Homeowners who have faced problems with previously unpermitted improvements pay a big price in terms of time, energy, worry and frustration, not to mention the dollar value of making things right, according to a story reported by CTV Vancouver.

For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.


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The Neal Estate Team

The Neal Estate Team is your #1 source for all of your Victoria BC real estate needs. Get in touch with us online or by phone at (250) 386-8181 to speak with a Victoria real estate buying or selling expert today. With decades of experience as a top selling Victoria REALTOR® and ranked in top 1% globally with over 4,000 transactions and $1 Billion SOLD, Ron Neal & The Neal Estate Team have the industry experience and market knowledge to help you make smart and informed buying or selling decisions. 

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