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If A Tree Falls On A House

Posted Mar 4th, 2019 in Karin, Community, Market News, Home Page

What Happened:

CBC came out with a story today about a Port Perry family that faces multiple challenges after a tree fell on their house. Brian Carlson-Graves and Daniela Malandruccolo purchased their home on Lake Scugog privately in 2015. Two years later a fierce wind storm toppled a tree onto their house causing significant damage. Their insurance company was contacted and engineers came to assess the damage. The contractors tasked to do the repairs correctly applied to the Township of Scugog for permits. This is when the story gets tangled. The Township declared that two-thirds of the house was built without permits and thus Township wouldn't grant new permits. Meanwhile, the insurance company has a deadline for work to be completed by October 2019. 


(Daniela Malandruccolo)

Coulda Woulda Shoulda:

My sympathies go out to this couple and to the Township. It's a messy situation. Seems that with hindsight, the blame game is pretty powerful. 

Homeowners - They bought privately. Had they used a Realtor, things may or may not have been any different. Remember, it was 2015 when they first purchased. The housing frenzy was starting to heat up. Deals were often made quickly and without much deliberation. If there was a bidding war, the winner was usually the one with the best offer price wise and conditions wise. Had they had the time, it would have been prudent for the Buyers to visit the Township Office and ask more details about the property and neighbourhood. Aside from permits, people don't want to be surprised with things like wind turbines, or solar farms going up across the street any time soon. With waterfront homes, the Ministry of Environment (MOE) should also be consulted. 

Previous Homeowners - There's a term in Real Estate law known as Patent Defect and Latent Defect. A Patent Defect is something like a cracked window. A Buyer can clearly see it [pun intended] therefore its existence doesn't have to be disclosed to the Buyer. A Latent Defect is something that is hidden from view such as a basement that leaks and has been drywalled over. Latent Defects must be disclosed to the Buyer. In this situation, what is it? A Patent or Latent Defect or neither? We are assuming from the CBC article that the Seller did not disclose the lack of permits. Buyers can reasonably discover the existence or lack of permits by going to the Township. The smoking gun in this case would be whether or not the Seller actively misrepresented the condition of the property to the Buyer. 

The Perpetrator - It's a lot easier to cut suspect trees before they come crashing down. Judging from the photos in this situation though, the tree did not look very old or menacing. 


(Daniela Malandruccolo)

Lawyers - Depending on the level of involvement that Brian and Daniela requested from their Lawyer, he/she too may not have been privy to information with respect to a lack of permits. Most lawyers encourage their clients to purchase Title Insurance. It's uncertain whether this would have protected the Buyers in this situation but it's a good policy for homebuyers to purchase nonetheless. 

The Offer - A warranty clause in the Offer such as the one below, would have protected the Buyers. Even so, it would take years of litigation to come to a resolution. 

The Seller represents and warrants, to the best of his knowledge and belief, that:(1) the buildings now located on the property are located wholly on the property and comply with all zoning and building bylaws; and (2) the driveways serving the property are located wholly within the limits of the property, and entrance relating to such driveways have been approved by the appropriate road authority. The Parties agree that these representations and warranties shall survive and not merge on completion of this transaction, but apply only to the state of the property existing at completion of this transaction.

The Township - There's not enough money for Town Planners to go from house to house to ensure no discrete, illegal building is going on. Unless the neighbours complain, the Township would likely have no knowledge of this. Neighbours aren't likely to complain if their property is similarly challenged.

Home Insurance - Thanks in part to CBC's bringing this story to light, it appears the Insurance company has the flexibility to extend their deadline. Let's hope they do. 

What now? 

Grandfathering or accepting the renovations would create an unhealthy precedent. No one wins in a lawsuit as they are costly and time consuming. Is it reasonable to have the additions demolished as in this case in Alberta or this one in the United Kingdom? Neither of these cases speak to a secondary owner who purchased a property unawares.

The CBC article indicated that "The entire house needs to be demolished because it's been deemed structurally unsound". In recent years the town bylaws were updated to disallow any new building within 100' of the lake. Should the Township allow them to rebuild in full, or on the grandfathered allowable footprint, or not at all?  What about input from Kawartha Conservation who are a watershed-based organization established under the Ontario Conservation Authorities Act?

One more thing to consider. The only winners in this situation are the original Owners who undertook the renovations without a permit. Not only did they save money with the reno, but they also would have paid less Property Taxes. Building Permits and house sales are what trigger MPAC (Municipal Property Assessment Corporation) to reassess houses. When others don't pay their fair share, you and I as taxpayers are having to compensate.

What do you think should happen here? 


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