Greater Sudbury has a building permit issue.
This sentiment was shared by local real estate lawyers and accepted by city council members and staff during the Nov. 13 Future-Ready Development Services Ad-Hoc Committee meeting.
During the meeting, Sudbury District Law Association president James Carpino said last-minute development permit issues cause a great deal of stress, and can delay deals.
“It’s all a rush in a very short period of time, and this is happening on every second or third deal we do,” he said, an estimate fellow lawyer Amanda Berloni later refined as representing approximately one-third of real estate transactions.
The issue, he said, is people opening building permits and never going through the process to close them when work has capped.
Between their two offices, the lawyers estimated that they handle approximately 70 per cent of local real estate transactions.
People are also undertaking work that requires building permits but not going through the proper channels, which gets flagged when properties change hands.
“We want to incentivize them to get the permit out in the first place, which everyone should be doing,” he said.
City Permits and Approvals manager Denise Clement added municipal context to the situation, noting that the city carries more than 118,000 records within Building Services’ holdings, and has issued almost 42,000 permits since 1980.
Of these, approximately 17,300 are currently open and active in various stages of the inspection process, including approximately 15,000 pre-dating 2022.
Tackling outstanding permit issues at the last minute is no straightforward undertaking, Berloni told Sudbury.com following a recent meeting.
“You have to think about a buyer waiting with their moving truck, they have everything ready to go and anticipate closing on a certain day, and now because of a permit problem, that’s held up,” she said.
“Moving is already one of the most inconvenient processes of life, so if you then have to push out those dates, it just adds insult to injury.”
Although she said it’s rare “real” estate transactions are cancelled due to permit issues, it’s a potentially costly hassle nonetheless.
Making matters even more potentially costly is the fact insurance companies have placed limitations on title insurance within Greater Sudbury, which Berloni said is only one of two jurisdictions in Canada where this has taken place.
Title insurance was created in the ’90s and came into full force in the 2000s, Berloni said, and covers a variety of things, including losses related to the property’s title or ownership.
Berloni relayed that one insurance company’s title insurance payouts are approximately 80 per cent tied to such things as tax and water arrears, across all jurisdictions they serve.
In Greater Sudbury, almost 98 per cent of claims were for permit and work orders, prompting insurance companies to place limitations on coverage due to paying out too much on claims.
Insurance companies vary in their approach to Greater Sudbury, she said, with some providing no coverage for permit-related issues, while others have placed a $10,000 cap (the cap is typically a property’s value).
“I struggle sometimes to understand why in every market … why we are one of two jurisdictions facing the problem,” Berloni told the committee, later adding in conversation with Sudbury.com that she doesn’t fully understand why Greater Sudburians have such an issue with building permits compared to much of the balance of the country.
During the Nov. 13 meeting, Ward 10 Coun. Fern Cormier, a real estate agent by trade, said he has received panicked phone calls from clients two days before closing regarding permit issues.
In the field for decades, he said title insurance has been a longstanding issue.
“A lot of people were willing to be blind to certain things because the attitude was, ‘It’s OK. Title insurance is going to cover it. I’ll get a new garage,’” he said, adding that deals would close and insurance claims skyrocketed.
Now, Cormier is striving to weed out issues early on and he has been encouraging people to resolve
“It should have never been in the air supply that title insurance was going to build you a brand new garage, so changing that dialogue needs to happen as well,” Berloni said.
“What we’d like to see is a shift in the mentality all the way around so we as a community can have some of the basic protections that every other jurisdiction in this country has.”
With 17,300 outstanding permits and another 2,000 permits added to the pile every year while some are resolved, WArd 5 Coun. Mike Parent said the situation “seems insurmountable.”
A number of potential solutions were bandied about during the meeting, which was capped by city Planning and Growth general manager Kris Longston pledging to compile a report on potential solutions, costs and impacts during the next committee meeting, which has yet to be scheduled.
The lawyers recommended automatically closing off certain permits that have been open for decades.
“If something has been open for 20 years and if the thing hasn’t fallen down, then perhaps it’s structurally sound, so you can conditionally close permits,” Berloni said.
The Greater Sudbury Chamber of Commerce similarly recommended the implementation of a legal non-conforming policy to address permits at least 15 years of age.
This, Greater Sudbury Chamber of Commerce director Tracy Nutt said, “would help resolve legacy permitting issues that delay property transactions. … They are delaying sales, creating costly delays to the buyers and sellers, and trigger complex retroactive approvals and sometimes fines to homeowners who had absolutely no idea that they’re selling a home with an open permit on it.”
Longston expressed concerns regarding liability if the city were to simply close building permits without the proper checks and balances, which will be addressed in the city’s upcoming report.
The lawyers also recommended various steps the city could take to make obtaining a development permit less cumbersome, while Ward 4 Coun. Pauline Fortin recommended a mail-out to remind people who have outstanding permits that they need to be closed..
The city has been ramping up Pronto in recent years, an online service which includes online building permit applications. The city has promoted the effort as a means of simplifying the building permit process. For more information, click here.
Cormier’s advice?
If you think a renovation might need a building permit, “Just assume you do.”
Sudbury.com will continue to follow this story as it develops, including the upcoming municipal report staff pledged on potential solutions.
Tyler Clarke covers city hall and political affairs for Sudbury.com.