by Robert Wright

Many times I get asked about permits for a renovation project. Many people don’t want to spend the money or are private. They also don’t understand why they are needed and when.

It’s about your safety (and peace of mind).

I have again visited a renovation gone bad. As we discuss the various issues, I asked if they have had any permits pulled….the answer was “I don’t know”. This is the wrong answer. It also confirmed some of my thoughts about the project. Not a good situation all way round.

So how hard is it to get a permit? An electrical permit is done with a phone call to ESA. Homeowners can pull one as well as an electrician. ESA has been getting very tough on non permit installations. This is because too many people are getting hurt and houses are burning down. With current regulations, a building permit has to be issued in 2 weeks if there are no problems with the application and other documents. It usually takes the design professional at least 2 weeks to produce drawings suitable for the application process.

What about a building permit? Every municipality is a bit different about which permits are required when. When you are only changing finishes, usually no permits are required. You will need a building permit for most renovation work and usually also a plumbing permit. In addition, you may need a HVAC and gas permit.

The biggest expense for a building permit is not the fee. It is preparing the drawings and documents for the permit application. The architect, interior designer, and/or the engineer make sure what will work well for you and ensure it will stand up. The design fee can range from about $1k to many k’s. The permit fees can be less than $100.00.

So what does a permit give you? The biggest thing it gives you is peace of mind and safety. When you apply for permits the city confirms that nothing being planned has a code issue. When you have the new work inspected at the various stages, they confirm that the work is competed to code.

So how does this give you peace of mind? God forbid you have a major problem and you have to make an insurance claim. One of the first questions you will be asked is “Who did the work and was permit “pulled”?” The worse case scenario is the insurance company denies the claim or they pay out the claim and you can not get insurance in the future. As Clint once said, “do you feel lucky?”

About the Author

Rob Wright has grown up around construction and in the mid 1990’s, Rob joined and took over Citadel Renovations in Ottawa. Rob has presented seminars at the local home shows on various renovations subjects and is a contributor to the Home Renovation Guide. Rob has been active in the Greater Ottawa Home Builders Association for many years and previously served as the Renovation Council Chair. For more information, visit CitadelRenovations.com.

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While the U.S. Census Bureau no longer gathers statistics specifically focused on home renovations, up in chilly Canada yearly stats are published on what’s happening in the world of remodelling, compiled by the Canadian Mortgage and Housing Corporation (CMHC).

Usually, what’s happening in America is happening in Canada—economically speaking. Usually, but not always; it seems like Canada is charting its own future these days. Unlike American builders and renovators, which have taken a hit since the economic slowdown and credit crisis began, Canadian contractors are doing well.

In 2007, Canadians spent close to $19.7 billion on home renovations—about 37 per cent of households across 10 major cities from Vancouver to St. John’s, N.L., according to the recently released CMHC Renovation and Home Purchase Report. An estimated 1.5 million households completed some form of reno in 2007, and while this number is down slightly from 2006, when 39 per cent of all households renovated, things are not exactly cooling off.

Homeowners across Canada spend an average of $12,800 on renovations in 2007, an increase of more than $1,000 compared to 2006. The highest average amount spent was in Calgary, at $15,600, and increase of $3,000 over 2006. The lowest average for 2007 was Winnipeg, at $7,900, a decline of more than $2,000 from 2006.

Statistics Canada divides home renovations into two categories: improvement/alteration, which refers to work done to increase the enjoyment or value of the home, such as a deck or addition; and repair/maintenance, a renovation undertaken to keep the home in working order. According to the CMHC report, 59 per cent of households renovated for improvement, 48 for repair or maintenance, seven per cent to add more space and five per cent to make their home more energy efficient.

More stats: 31 per cent of renovating households remodelled a room, followed by painting/wallpapering and flooring/carpeting, at about 27 per cent. In Ottawa and Edmonton, 20 per cent of all reno projects in 2007 involved some type of major landscaping or exterior addition, including patios, swimming pools and outdoor kitchens.

Every week there’s another story—or reality TV episode—about a homeowner getting ripped off by a lazy, incompetent contractor; or worse, a contractor who cashes the homeowner’s deposit but never actually does the work. According to the Federal Trade Commission, home reno fraud is a growing problem in North America, especially with seniors. These cases typically involve door-to-door salespeople who “happen to be doing work in the area,” and sell the naive homeowner on their scam. The stories are disheartening, not just for homeowners but also for the thousands of legitimate, qualified, legal contractors in North America. Luckily, protecting yourself from shoddy work or fraud is easy with a few safeguards.

Step 1: Shop Around
You don’t walk into a store and buy the first TV you see, and the same holds true for contractors. Once you’ve figured out the basic dimensions of your reno, get at least three written, detailed cost estimates. Don’t assume the low-ball is the smartest buy; the cheapest deal isn’t necessarily the best over the long term, especially in the case of home repair. If one contractor’s price is higher than the rest, find out why. Often it’s because all costs are included in the estimate, rather than hitting you with add-ons once the job is underway.

Step 2: Check References
Hiring a contractor is like hiring any employee; they’re working for you, so before committing to pay, check their references. Any legitimate contractor will gladly hand over a half-dozen references because they know they’ll receive praise. If a contractor balks when asked for references, move on. Besides references, ask to see photos of recent work or even visit the jobsite of a current customer. Finally, check with your local Better Business Bureau to see if the contractor has received any grievance complaints.

Step 3: Get it in Writing
You’ve shopped around and are keen to move ahead with the project. But before hammers start swinging and cheques get cashing, draw up a detailed contract that includes everything from cost breakdowns (materials and labour) to start and end dates, and warranty information. For big jobs—home additions, for example—consider hiring a lawyer to do a final check through.

Step 4: Paying Up
The next step is, you guessed it, money. Typically, contractors ask for about 20 per cent up-front and the rest upon completion. If they’re asking for more, this should send up some warning signals. Remember, it’s never too late to move onto another contractor, although it may cost you your initial deposit. The second caveat, no matter how tempting, is to avoid cash deals. Cash deals can leave you unprotected if things go wrong.
Avoiding home renovation scams is easy so long as you follow these basic guidelines. And don’t worry about feeling like you’re annoying the contractor with these issues; the good ones will encourage questions and do their best to answer them fully.

Some useful links:
Canada Mortgage and Housing Corporation, on hiring a contractor

Get it in Writing, a site devoted to hiring contractors

Canadian Better Business Bureau association, and the American equivalent

With the City of Toronto beginning its public consultations on potential new taxes, Toronto realtors are hoping that Mayor Miller and City Council will heed their advice: do not impose a home-buying tax.

Public meetings are an opportunity for Toronto residents and businesses to tell the City what they think of various new taxes that are being considered. These proposals were announced less than two months ago, and the City’s Executive Committee could make decisions on them next month.

Possibly the biggest tax that could be levied by the City would be a second land transfer tax, paid by homebuyers on top of the existing provincial land transfer tax. A second land transfer tax of as little as 0.5 per cent would mean that average Toronto homebuyers would have to come up with close to $2,000 extra when buying a home, a 45 per cent increase in the land transfer taxes that they already pay.

‘We appreciate any opportunity to inform the City about how misguided a Toronto home-buying tax is, but this issue is too serious to wait for the City’s formal public meetings to start. As soon as realtors found out about the proposed home buying tax, they started contacting the Mayor and City Councillors directly to tell them to shelve this crazy idea. Hundreds of realtors, that we are aware of, have already sent emails to the Mayor and City Councillors,’ said Dorothy Mason, President of the Toronto Real Estate Board (TREB).

‘Not just realtors have been speaking out against this tax. As soon as their clients, the general public, found out about this they are shocked that the City would even think about this. Many of them are letting TREB know about their concerns at the same time that they send them to the City, and from what we have seen, it’s clear that the public is very concerned about a Toronto homebuying tax,’ said Mason.

The concerns that realtors and the public have been expressing are numerous. Specifically, they have told the City that a homebuying tax would hurt homebuyers, home sellers, businesses, the economy, and the environment (Excerpts from realtor and public correspondence provided below).

‘A home-buying tax would hurt those who can least afford it the most. Many homebuyers already have to heavily finance their home purchase to be able to live in Toronto. If they have to find another $2,000, or more, for this tax, they will end up having less money for a down payment, which will mean a bigger mortgage, over $1,700 in extra mortgage interest, and possibly more mortgage insurance costs. For a homebuyer of an average Toronto property that could only afford a five per cent down payment, the Toronto home-buying tax could ultimately end up costing them over $11,000 in added costs when mortgage insurance and interest are considered,’ said Mason.

‘The unfortunate thing is that, at the end of the day, a Toronto home buying tax could mean less, not more, revenue for the City because less demand for Toronto housing will mean less property assessment growth, which would mean less property tax revenue for the City,’ added Mason.

Until recently, the City has only been allowed to levy property taxes.

‘These are unprecedented decisions that the Mayor and City Council are making, so the last thing they should be doing is rushing, but that is exactly what they are doing. The City needs to make sure that it takes the time to fully understand the ramifications of a homebuying tax,’ said Mason

*Courtesy of the Toronto Real Estate Board – Make the Right Move – Consult a Toronto Real Estate Board REALTOR

Chris Paulsen
cpaulsen@homerenovationguide.com

What is real estate fraud?
Fraud can affect any type of property, whether it’s real estate, monetary investments or items you buy like paintings. There are several types of real estate fraud:

• Stealing title: when the crook changes the ownership or title of your property into his or her name. The crook may intend to sell the property or mortgage it behind your back. In either case, the criminal is fraudulently impersonating you and/or forging your signature.

• Obtaining an illegal mortgage: when the criminal leaves title or ownership in your name, but puts a mortgage on it illegally. Once again, you (and the lender under the mortgage) are the victim of an impersonator and or forger.

• Value fraud: where you are tricked into believing the property is worth considerably more than it is. Remember that there is nothing necessarily illegal about buying low and selling high, unless it involves fraudulent concealment or intentional misrepresentation (such as giving you a forged appraisal or fraudulent comparables).

Why is real estate fraud happening?
Real estate fraud is a continent-wide, if not global, phenomenon. So, there is nothing unique about Canada that is making our properties vulnerable to it.
It is likely related to the upsurge in identity theft, which is reported about regularly in the media. As population centres have grown in North America and people have become more mobile, those involved in the real estate industry (such as sales agents, mortgage brokers, lenders and lawyers) are less likely to know all of their clients on a long-term basis. When towns were small and everyone knew each other, it was pretty difficult to impersonate a local landowner to steal title!

These developments are compounded by the rise of the Internet, which makes obtaining a mortgage loan, for example, more convenient while (to some extent) de-personalizing the process.

*Article courtesy of Titleplus.ca – Now That’s Protection
Chris Paulsen
cpaulsen@homerenovationguide.com

Whether building a new home or renovating an old one, choose your contractor carefully. Start by writing your project down, including a floor-plan sketch. Ask friends, family and neighbours about good and bad contractors. Select several contractors and arrange to meet with them. During the meeting, ask each of them:

* How long have they been in business

* What experience have they with projects such as yours

* Their registration numbers for trade associations, the Better Business Bureau, Workers’ Compensation and private liability insurance

Reputable contractors will gladly answer these questions. Avoid those who balk.

Have the contractor supply at least three references. Ask these former clients about their experiences and, if possible, visit their projects for a first-hand look. Ask your local Better Business Bureau if there have been complaints and how the contractor handled them. Stay away from websites that use a user review ranking system or bidding systems, they can’t guarantee review legitimacy and no contractor can bid on a job without seeing your home.

A major project may require professionally drawn plans. Instead of hiring an expensive architect, pay one prospective contractor to draw them. Then you’ll own the plans outright and can show them to other bidders. Welcome suggestions. An experienced contractor may have good ideas you never thought of.

Each estimate should state prices for labour, materials (including brand and model names where applicable), and all other expenses. It should also describe the warranty. Don’t necessarily choose the lowest bid. Ensure that yours includes:

* The contractor’s name, address and telephone number, along with registration numbers of the firm’s operating license, memberships in trade associations or the Better Business Bureau and Workers’ Compensation. Also include details of private liability insurance coverage. You could be held liable if insurance doesn’t cover an injured worker. If subcontractors are involved, the contract should list similar information for them.

* A detailed listing of the work to be done and all products to be used. The contract could specify either a set price, to which the contractor is committed regardless of unforeseen complications, or a cost price, which allows the contractor to charge extra for such problems.

* An hourly rate for labour. This is most important in a cost-price contract, but is also necessary in a set-price contract, in case you decide to change the plan after work has begun.

* A schedule for payments. Pay only a nominal deposit before work has begun. Then, arrange for payments as work progresses. Avoid scheduling payments for predetermined calendar dates. Instead, pay as each stage is completed.

Never sign a partial or blank contract. Any later changes should be added in writing and signed by both parties. During the project, deal directly with the contractor rather than the tradespeople. Handle problems as they arise and be reasonable. Be considerate of the contractor’s needs, such as parking space for work vehicles.

Renovating your home can be an exciting and rewarding process. Whether you are making modest changes in one or two rooms, or you are transforming the entire house into a dream of a lifetime, the process can be pleasant and smooth, if you take the time to plan your project carefully.

The Renovation Council of the Greater Vancouver Home Builders’ Association (GVHBA), suggests that homeowners can ensure a successful renovation if they follow these 10 steps:

1. Do your homework. Advance research is the key to getting what you want. Study magazines and books to get an idea of the look you want. Visit friends, family members and colleagues who have renovated recently. Consider your lifestyle and the needs of your family, both in the short and long term.

2. Find out how much you can afford. Once your have a firm idea of the kind of renovation you would like to undertake, it is time to decide how you are going to pay for it. If you are thinking about using outside funds, discuss your borrowing needs and options with your lender. You will probably find that there are many financing possibilities to consider, from personal loans and lines of credit to home equity loans and homeowner’s mortgages.

3. Look for a professional renovator. Ask family and friends for recommendations. Drive around your neighbourhood to see who is renovating, then talk to the homeowners about their project. Most people are delighted to share their renovation experiences.

4. Get estimates. Obtain two or three different bids; more are usually not required. Make sure that you provide all the renovators with the same detailed information. It is important that they bid on the same job, or you will not be able to compare estimates. This information could be a description of the job including sketches, drawings, photographs and measures.For estimates involving major structural changes such as additions or moving interior walls, renovators may also need a set of plans. An architect could be a great help here. The set of plans includes site and floor plans, elevations and detailed drawings. The plan forms the basis for the estimating process and will also be used to obtain building permits. Be honest and open about your budget. The renovator will be able to make suggestions that will help you stay within your budget or provide alternative ideas to stretch your dollars.

5. Check references. Don’t omit this step just because you are too busy or “they seem like the right person for the job.”

6. Work out a contract. Don’t automatically take the lowest bid, unless you are certain that the renovator has properly understood what you want. Sometimes low bids turn out to be the most expensive in the end. When you accept the renovator’s offer, it’s time to write up a contract. Even the simplest of jobs should be outlined in writing because the contract is the basis of understanding between you and your renovator. Before signing a contract, read it carefully. Are you satisfied with the description of the work to be done? Does the payment schedule include holdbacks? Are the responsibilities of the renovator clearly spelled out? Remember that if something is not in the contract, then it’s your responsibility. Have a lawyer examine the contract before you sign it.

7. Plan how you will live during the renovation. Careful planning can greatly minimize inconvenience of living in the midst of a renovation. Talk to your renovator about the schedule of work to be done and how your daily routine might be affected. For instance, will the water be turned off for any length of time? Do you need to set up a temporary kitchen elsewhere in the home? Can major work be done in stages so as you always have a livable space? Discuss your expectations of the work crew and determine the work environment. The crew needs access to washroom facilities, telephones, water and electricity. Decide which areas of your home are off limits. It is a good idea to let your neighbours know that you are going to be renovating. Show them your plans and explain how long the work will be going on.

8. Establish a good working relationship and mutual trust with your renovator. Renovators and homeowners agree that a good working relationship is a vital ingredient in successful renovation projects. Keep lines of communication open at all times. Expect a brief report on the progress of your job at regular intervals, perhaps every evening. Be available to make decisions when they are needed so work is not held up, perhaps costing you more money. Don’t hesitate to bring your concerns to the attention of the renovator.

9. Try to stick with your first choices. Once work is underway, changes should be kept to a minimum. The details of your project are described in the contract, down to the finishing touches, from the basis of both the price and the schedule of your job. Changes could affect both significantly. Your GVHBA member renovator, however, wants you to be satisfied with the final result, and will likely attempt to accommodate any alteration in plans, as long as you accept a possible delay in completion and/or a change in price.

10. Be prepared to enjoy the results. Research, good planning, a professional work crew and open communication and trust, a recipe for a home renovation that you will enjoy for years to come!

Article compliments of the Greater Vancouver Home Builders Association, www.gvhba.org

For more information please visit their web site.

posted by Nikki Rollins nrollins@homerenovationguide.com

Congratulations! You have decided to purchase a home, or are thinking about buying one. With this choice, you’re joining the ranks of hundreds of families who realize that home ownership offers a number of benefits, including building equity, saving for the future, and creating an environment for your family. When you own your home, your hard-earned dollars contribute to your mortgage, not a landlord’s. The equity you earn is yours. Over time, your home will increase in value.

In this Home Buyer’s Guide, you will find the information you need to make a wise buying decision. We will take you through the planning process step-by-step, to help you determine which home is right for you. You will find a host of informative articles on mortgages, viewing homes, the offer, closing details and moving.

Pre-shopping
Before you start shopping for your home, why not give some thought to your lifestyle, the features you need and want, affordability, and the neighborhoods you prefer. With the information you will come closer to finding your perfect home – sooner!

Arranging a mortgage
Most people require a mortgage to purchase a home. This section explains the elements of a mortgage including type, terms, and how to qualify for one. In addition, choosing the right mortgage for your needs can help you retire this financial obligation sooner.

Viewing Homes
This section gives you some advice on making the most of your viewing experience. When you separate emotion from facts, and the condition of the house, you will be in a better position to purchase a home that meets both your needs, and your budget. You can also avoid any costly errors that could lead to future problems.

The Offer
This section explains the components of an offer and how it forms an essential part of your purchase.

Closing
Buying a home is a complicated process involving a buyer and seller, and lawyers for each of these parties. This section will explain the importance of a home inspection, title transfer, appraisal, and surveyor, to ensure you are legally protected.

The Move
While moving is inconvenient and disrupting there are some ways to make the move more manageable. You might even save some money in the process.

**Article and information courtesy of:

Justin Havre & Associates are a dedicated team of professionals with access to all of Calgary’s real estate opportunities. Be assured of a quality, comprehensive experience with these award winning realtors working for you.

Chris Paulsen
cpaulsen@homerenovationguide.com