What are building permits?
We can find the answers to queries in the Toronto.ca homeowners’ guide.
Q: We plan to buy a home where a knob and tube wiring is in place. What do we do?
A: There are several options that are available to you. First, you can rewire. You can ask a reputable electrician for a quotation so you will know the cost beforehand. You can do this procedure during home inspection. Insurance companies normally gives you time to rewire after closing the sale. The second option is to keep the knob and tube in place and find an insurance company that will cover the home. This might be difficult to do, but it is doable. This type of rewiring is allowed under the authority information bulletin 02-03 of the Electrical Safety Authority — if it meet s certain criteria. If you get an approval on wiring safety, you will have no trouble getting insurance as stated in the Insurance Bureau of Canada 416-445-5912.
Q: What is a knob and tube wiring?
A: This is the old type of electrical wiring that was in place until the 1950s. This consists of two wires that are linked by the use of ceramic knobs and tube to create a circuit. The present wiring system, bundles these two wires together with the use of a ground wire in a plastic sheathing cable. This cable then runs through the holes in the structural members and is held by clamps together. While this system may not be intrinsically dangerous, its insulation may be outdated and no longer workable. This type of wiring is concealed behind the ceilings and walls of the home and is hard to inspect. For more information, you may refer to the August Beaches HomeWatch.
Q: Would it be hard to get insurance because I have knob and tube wiring?
Insurance companies are hesitant most times, to cover older homes with knob and tube wiring. There are issues on safety concerns, which redound to buyers unable to renew insurance coverage on old homes.
The Insurance Bureau of Canada (IBC) stated that there are few companies that provides insurance coverage for homes with tube and wiring systems in Ontario. However, Carson Dunlop, a home inspection company, has an exclusive agreement with Liberty Mutual to provide insurance coverage, if the former is made to inspect the home. For more information, please see the Insurance Brokers Association of Ontario (IBAO) website.
A more in-depth information are provided in the August issue in the Beaches HomeWatch page.
Q. Will I have problems about galvanized plumbing?
A. There are difficulties in finding an insurance agency for these type of homes, as indicated by IBAO. However, some specialty companies exist that grants coverage if specified conditions are met. An example, would be Genmark who provides coverage if —there are no previous claims for the galvanized plumbing, a thorough inspection was made, and corroded pipings were replaced. For further information, please refer to http://www.amerispec.ca/
Q. How much will I spend for closing cost?
A. There is no hard and fast rule. The Rule of Thumb estimate is 2 percent of the purchase price.
Q: What are the Costs that I may incur?
Land Transfer Tax- Provincial: Buyers of real estate pays a onetime payment; new home buyers are exempt from payment. The range is from 1.5 percent to 2.0 percent of the purchase price.
Land Transfer Tax City -Toronto: This is a levy imposed by the Toronto City Council for the payment of Municipal Land Transfer Tax on top of the Provincial Land Transfer Tax beginning February 2008. The range is from 1.5 percent to 2.0 percent of the purchase price.
Legal Fees: Payable to the legal counsel who would register the mortgage and help with closing the purchase. To avoid confusion, it would be best to inquire about legal fees and reimbursable disbursements before hand. The cost may range from $1,000 to $1,500.
Home Inspection and Appraisal Fees: These are paid for the inspection of the home if it is in good condition. The appraisal ascertains that the price you pay for the home is in line with prevailing market values. The budget is about $500.
PST on CMHC (Canada Mortgage and Home Corporation) mortgage (Below 25% down payment): This is applicable to CMHC insurance that comprises eight percent of the insurance premium. Approximate budget is from $300 to $500.
Interest, property tax and other adjustments: The computation is based on the closing date of purchase. There is need to reimburse the previous owner if he has paid up property taxes up to a certain cut-off period leading to the closing dates. Approximate cost is $500.
Closing cost: This would amount to approximately two percent of the purchase price.
Buying a House
If you are intent on buying a particular house and have signed the Agreement of Purchase and Sale, you need to fill up the OHOSP Home Purchase Declaration right away. This should be done four weeks before closing so as to give you ample time. You can get this from the financial institution where you filled your OHOSP. The funds will be released through your solicitor who will apply it as payment of the home. If you do not have a solicitor, you may apply with the Ministry of Finance so the funds can be released by the agency to you.
Closing an OHOSP without Buying a Home
If you do not have plans of buying a home and opts to close your plan instead, you will not be eligible for tax credit that year. You will instead recover only 75 percent of the funds from the plan, and the 25 percent will be forwarded to the Ministry of Finance for tax credit. The balance, if there be any, will be returned to you plus interest.
OHOSP Tax Credits
The OHOSP tax credits are computed based on your net income for the year and your contribution to OHOSP every year. Only one spouse can claim the OHOST tax credit and are based on your annual net income (line 236 of your income tax form) and contributions to your plan per year.
On the other hand, the Land Transfer Tax (LTT) refund, which was initially part of the original plan, has been discontinued. The LTT refunds however, will be issued to those who opened the plan prior to January 1, 1994.
Q: What is UFFI and its effects on people’s health?
A: UFFI is a retrofit insulation that was banned due to perceptions that it poses a health risk to the public. This was used in most Canadian homes — from 1977-1980, under the Canadian Home Insulation Program (CHIP).
A litigation process followed and the use of UFFI in homes depressed property values when in used due to this public perception. After eight years of court battle, the Quebec Supreme Court rendered a ruling against the plaintiff and ordered it to pay the defendants the cost of litigation.
UFFI is a good house insulator. It fell in disfavor due to wrong public perception that it causes respiratory ailments. The reason is that formaldehyde gas is emitted above allowable concentration and causes irritation to people who are sensitive to it. These allegations were baseless. You can find higher gas readings in newly installed carpets today than a house with UFFI, two weeks after installation.
In my opinion, I would say that there is no issue about the use of UFFI in the home. I would not have qualms in living in a house that has UFFI installed. I suggest that the Real Estate Board and Mortgage lenders remove the clauses for penalties in the use of UFFI. Source: Tim Purtill, Canspec
Q: Is there a danger to using Aluminum Wiring?
A: The use of aluminum wiring was done between 1969 and 1975. It was discontinued since it has higher maintenance cost as compared to copper. Aluminum has its disadvantages —it has a higher expansion coefficient than copper and can mushroom under peak loads. This would result to removal of plugs and switches and screws to be tightened for good contact. Not doing this would result to plugs and lights ceasing to operate. This is due to poor contact points which causes hot spots to occur and make the aluminum wire brittle. This eventually leads to breakage sooner or later.
With aluminum wiring in placed, it would be safe to assume that the electrical system must have experienced peak loads one time or another if the house has been around in the past 25 to 30 years. If no electrical irregularities were found during house inspection, insurance may be availed of but at higher premium level. If however, electrical irregularities were found, it is advisable to hire a professional electrician to tune up the system. The will cost $250 more or less. Source: Tim Purtill, Canspec Home Services.
Q: What are the reasonable costs of upgrades that we may need in our home?
A: You may refer to the posts by Carson and Dunlop Home Inspection Company which has a quick reference to the construction costs at 2005 prices. Source links is at: http://www.carsondunlop.com/