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Quick answer: In Ontario, building permits stay with the property, not the person who pulled them. If a renovation’s permit was never closed, or work was done without one, the new owner may have to deal with inspections, repairs or city orders. The standard Ontario offer lets buyers object to work orders, but open permits are not clearly covered, and title insurance has limits. Buyers: search the permit history and add a clause. Sellers: close old permits before you list.
Key takeaways
- An open permit means the city never confirmed the work passed final inspection.
- Unpermitted basement apartments, decks, additions and structural changes are the most common problems.
- Some unpaid city charges (like Toronto’s Vacant Home Tax) can become a lien that the buyer inherits.
A real-world style example
Priya buys a semi with a beautifully renovated basement. Two years later she applies to add a legal second unit. The city finds an open 2018 permit for the basement renovation that never had a final inspection. Before her new permit can move forward, inspectors want walls opened to check plumbing and fire separation. The bill: thousands of dollars and months of delay, for work she didn’t do.
Permits vs work orders
| What it is | Covered in the standard Ontario offer? | |
|---|---|---|
| Open permit | A permit was issued but never closed with a final inspection | Not clearly. Courts have disagreed. |
| Work order | The city has formally ordered the owner to fix something | Yes, buyers can object to outstanding work orders before closing. |
| Unpermitted work | Work done without any permit | Not covered. You must spot it yourself. |
For buyers: how to check
- Ask the seller for a list of renovations, permits and final inspection records.
- Search the city’s records. Toronto has an online building permit search, and other GTA cities offer searches or written requests (sometimes for a fee).
- Compare with what you see. A new basement apartment, addition or moved walls with no permit history is a warning sign.
- Ask your lawyer to send the city a request for work orders and open permits.
- Add a clause to your offer, for example that the seller will close any open permits before closing, or that the buyer can terminate if serious unpermitted work is found.
Title insurance is not a full safety net. Policies often cover some work-order and permit problems, but not all. Read what your policy actually covers.
Buying a renovated home?
I check permit history and build protection into your offer, so the previous owner’s shortcuts don’t become your bill.
Or call/text (647) 709-2814 · I speak English, Hindi and Punjabi
For sellers: clean up before you list
- Find your permits. Search your city’s records for anything still open.
- Book final inspections for finished work. Many open permits close with a single visit.
- Gather receipts and drawings for renovations.
- Be honest about unpermitted work. Knowingly hiding a serious problem can lead to a lawsuit after closing.
Sellers who arrive with closed permits and records sell faster and face fewer price reductions after inspections.
Other things that can follow the property
| Item | Why it matters |
|---|---|
| Toronto Vacant Home Tax | If the seller didn’t declare, the City says unpaid tax becomes the buyer’s responsibility and forms a lien. Your lawyer should check. |
| Unpaid water and utility bills | Some cities can add unpaid amounts to the property tax bill. |
| Rental equipment contracts | Water heater and HVAC contracts can carry liens (see our guide on rental water heater contracts). |
| Fire code orders | Especially for homes with basement units. |
FAQ
Can I close if there’s an open permit?
Often yes, but you may inherit the problem. Your lawyer can ask for the permit to be closed, a price reduction or a holdback.
Does unpermitted work always need to be removed?
Not always. Sometimes it can be inspected and approved after the fact, but that can mean opening walls.
Who is responsible for an open permit after I buy?
The current owner. That is why checking before closing matters.
Planning to sell? Let’s prepare properly.
A pre-listing review of permits and paperwork protects your price and your closing.
Or call/text (647) 709-2814 · Gursimran (Guru) Tamber, Sales Representative, CENTURY 21 People’s Choice Realty Inc., Brokerage
Keep reading
General information only, not legal advice. Every property is different, so have a real estate lawyer review your agreement.
Sources: City of Toronto: Closing building permits · Bennett Jones: Requisitioning the closure of open building permits · Toronto Vacant Home Tax guide
ABOUT THE AUTHOR
Gursimran (Guru) Tamber, Sales Representative
CENTURY 21 People’s Choice Realty Inc., Brokerage · RECO registration #5027219 · CENTURY 21 Pacesetter Gold (2024) and Masters Silver (2023) award winner
Guru helps buyers, sellers and investors across the GTA, Hamilton and Waterloo. Before real estate, he spent close to two decades leading IT transformation projects for Fortune 500 brands across Asia, Europe and North America. He speaks English, Hindi and Punjabi.
