ARE YOU SELLING YOUR PROPERTY WHERE YOU HAVE:
A mortgage helper, a Suite, unauthorized accommodation, renovations without permits, enclosed garage suites, enclosed balconies, opened up loft areas, etc... ALL WITHOUT PERMITS?
It’s time to sell and you have a basement suite in your home. It is unauthorized; in other words no permits were obtained to have the suite up and running. You may have enclosed the garage area or any of the other above mentioned items. All were done without permits ----now what?
You must always disclose the existence of any of these items to any potential buyer prior to entering into a contract. It must be in writing and it must be separate from the Contract.
Then you will have a statement in your contract stating for example,
“The buyers received separate written disclosure of the unauthorized suite separate, in writing and prior to entering into this Contract. The buyers were afforded the opportunity for independent legal professional advice.”
Because the above items are considered material latent defects. The onus of disclosure falls on you, the Seller.
Don’t panic. There are thousands of unauthorized suites, renovations done without permits and everyone is aware of it. The key is that you, the Seller, must make the proper disclosure and it is not a big deal as long as you disclose in the proper manner.
The Buyers are entitled to know in advance of entering into a contract that there were no permits for whatever it is and then they can make an informed decision on preparing to go ahead with their offer.
As I said, there are thousands of these type of properties and people are fully aware of them but the “law” requires we do this separate written disclosure. In other words, we bring it to the attention of any prospective Buyers so they can make the choice of whether or not to purchase the property.
Even though your suite may be unauthorized or you have done renovations without permits, it does not seem to stop anyone from buying these types of properties.
This is done every day and my simple advice to Sellers is to disclose as required. If you are in doubt about anything, just disclose.
You don’t want someone coming back to you in the future so let’s just sell your property without any problems.
A very important reminder though -- make sure your insurance company knows about the unauthorized suite or anything where you may not have followed the rules.
Your own homeowner’s insurance may not cover for example, a secondary suite.
The Insurance Companies do not care if anything is legal or not but you must let them know so they can insure you correctly with the right protection. This is extremely important.
The Insurance Companies do not pass on any information to the Municipalities or other Government authorities.
Insurance might cost you a little more but at least you are protected.
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