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Can open work permits keep you from selling your home?


Simon Orlov* was trying to sell his house in Fredericton, New Brunswick, and things were going smoothly. He’d found buyers who were excited about the property, they’d made a good offer, and they just wanted to complete their due diligence before closing the deal. Simon thought the hard part of the sale was over, but his trouble was only beginning.

The new buyers had their lawyer conduct a building inspection search with the City that revealed four open building permits for the property. Simon was shocked—the permits had been issued well before he bought the house, and he had no idea they existed.

A previous owner had opened the permits with the City years ago to do work on the house, but had never closed them. Now, to get them closed, an inspector came to verify that the work outlined in the permits had been done properly. The inspector flagged a number of issues with the work and determined that Simon needed to make almost two thousand dollars in repairs to bring everything into compliance and close the permits.

When the new buyers learned about the issues with the property, they started to back out of the deal. Simon was watching the sale of his property fall through thanks to shoddy work he never did, for permits he never opened. But he had a solution.

When he bought the property, Simon had purchased a residential title insurance policy from FCT on his lawyer’s advice. Now, it was time for us to step in and help resolve the situation. We confirmed there was coverage for the open building permits, but the deal was supposed to close soon, and the real issue was helping the nervous new buyers. They were worried about what would happen if the work wasn’t completed before the deal closed.

We committed to title insurance policies for the buyers and their lender, in case the open building permits couldn’t be addressed before the deal closed. Thanks to that assurance, they were more than happy to close the deal, and Simon successfully sold his house. We also covered the $1,752 for the repairs required by the City, since the order had come because of a previous owner’s unpermitted work.

The risks title insurance covers many risks that are often impossible to predict. That’s why it’s so important to protect every real estate transaction with a title insurance policy. For a low one-time fee, it protects you for as long as you have an interest in the property.

Thanks to his small investment, Simon saved himself more than the policy cost and salvaged a sale that was close to falling through. Ask your legal professional about getting protection like Simon’s with a residential title insurance policy from FCT.



Insurance by FCT Insurance Company Ltd. Services by First Canadian Title Company Limited. The services company does not provide insurance products. This material is intended to provide general information only. For specific coverage and exclusions, refer to the applicable policy. Copies are available upon request. Some products/services may vary by province. Prices and products/services offered are subject to change without notice.


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