PROTECTING YOUR RENOVATION INVESTMENT

Get it in Writing to Protect Your Renovation InvestmentWhen planning a renovation project, homeowners often consider how improvements will affect the value of their property should they sell their home in the future. In many cases, a well-designed renovation project will significantly enhance both the value of your home and its marketability. Upgrades to living areas, particularly kitchens and bathrooms, tend to generate the greatest return on your renovation dollar.

However, a trend towards greater property disclosure in the real estate business highlights the importance of doing it right—making sure renovation work is done properly and that all building permit and inspection requirements are met.

Property disclosure forms are becoming a common requirement for anyone selling a home. These forms provide buyers with information about the property that may otherwise be difficult to obtain, including any renovations and improvements made by the seller.

Disclosure forms vary from one province to another, but typically sellers are asked to provide information about the systems and the structure of the house, as well as their knowledge of any problems. Sellers are also asked to indicate if they have undertaken any renovations, additions or improvements, and if so, was it done according to code, was a building permit obtained, and was a final inspection done or an occupancy permit issued?

Homeowners who work with a professional renovator will be able to offer potential buyers clear information about the work done. Having obtained a proper contract for the work, including plans and specifications, they will have complete documentation—including a record of what permits were required and obtained. At the time of resale, these documents will back-up information provided in disclosure forms.

Informal business arrangements done on a handshake and without a written contract simply won’t provide the documentation you may need when you someday sell your home.

Source: Canadian Home Builders Association