For many, the thought of purchasing a heritage property sounds like a dream come true as they provide a unique opportunity for home buyers to own a literal piece of history.
However, purchasing a heritage property in Ontario also comes with legal implications – and any buyer interested in a heritage property should do their due diligence before purchasing one. This blog post will cover key considerations for heritage property purchasers, including what constitutes a heritage property and what prospective buyers should know about them.
Heritage properties are buildings or properties that are recognized for having unique cultural, historical, or architectural significance. Once registered as a heritage property, these properties are protected by municipalities under the Ontario Heritage Act.
A buyer should not be surprised to learn that you may be purchasing a heritage property, as the realtor will disclose this information. However, if you have any questions or concerns regarding the status of a property, you can check with the municipal government. They will be able to confirm the status of the property through their register of heritage properties in the municipality and should be able to tell you why the property in question has been designated as a heritage property.
If a property is not already designated as a heritage property, you can apply to your municipality for a heritage property designation. While the requirements can vary between municipalities, there is a general requirement that the property in question has some historical significance.
For example, the Toronto Preservation Board determines which buildings are worthy of heritage property designation based on prescribed criteria in Toronto. If the Toronto Preservation Board determines that a building should receive heritage property designation, they will refer the designation to Toronto City Council for a vote.
Several protections are in place to preserve heritage properties; therefore, heritage property owners must follow various requirements. Before purchasing a heritage property, prospective buyers need to consider the following elements.
Put simply, a heritage property will likely require more upkeep than a newly-built home due to its age (and, in some cases, its construction). Before purchasing a heritage property, prospective buyers need to think critically about the required upkeep and whether they are willing to commit to the costs of maintaining a heritage property.
Prospective buyers should also be aware of heritage conservation agreements.
There are three types of heritage conservation agreements outlined in the Municipal Act, namely:
- easement agreements between the property owner and the municipality;
- conservation easements between the property owner and the Ontario Heritage Trust; and
- agreements between the property owner and municipality, ensuring that the property is preserved.
These are legal agreements between heritage property owners and the Ontario Heritage Trust, which are sometimes put in place to protect significant features of heritage properties. These easements are designed to preserve certain historically significant aspects of a property (for example, a unique architectural design to the property) and can prevent owners from making certain alterations to a property.
If a purchaser is unsure whether a heritage conservation agreement is registered on a heritage property or whether an agreement exists in any form, it is recommended that they speak with a realtor or an experienced real estate lawyer who can investigate whether any agreements have been put in place, and explain what is required under the agreement.
In addition to heritage conservation agreements, additional rules and regulations may apply to the preservation of heritage properties. For example, an owner may need to obtain approval from their municipal council or a local heritage committee before undertaking alterations or renovations to the property.
Typically, heritage properties are more expensive to insure due to higher repair and maintenance costs. Therefore, prospective buyers need to consider the added costs associated with insuring a heritage property before committing to a purchase.
In some circumstances, heritage properties may come with more than historical significance. For example, if the property has not been updated, it may contain hazardous materials like lead paint or asbestos. Obtaining a home inspection before purchasing a property is a good idea so that these issues can be identified quickly, allowing buyers to plan for potential renovations to correct such defects.
Heritage property owners may be eligible for tax relief if the property is located in a municipality with a heritage property tax relief program. However, it is important to remember that eligibility and the amount of tax relief can vary between municipalities. For more information, consult directly with the municipality or an experienced real estate lawyer.
Whether you are thinking about purchasing a heritage property as an investment or a forever home, owning a piece of history can be an exciting prospect. However, before taking the plunge, it is essential first to consider whether owning a heritage property fits your goals and lifestyle.
Owning a heritage property comes with a lot of upkeep, further complicated by the regulations relating to alterations and renovations of heritage properties. Additionally, restoration costs, insurance, and health and safety concerns can create additional challenges for heritage property owners.
If you have considered these factors and still have your sights set on a heritage property, ensure you conduct due diligence by locating and identifying any relevant agreements long before signing a contract to purchase the property. Doing so will ensure you understand any obligations or restrictions on the heritage property and can move forward confidently with your purchase.
Oakville Real Estate Lawyers at Campbells LLP Represent Buyers, Sellers, and Professionals in Real Estate Transactions
Whether you are buying your first home or looking to invest in a heritage property, the experienced team of real estate lawyers at Campbells LLP in Oakville can guide you through every step of your transaction. Our lawyers can help ensure that you have completed your due diligence and assist you at every step of the transaction. In the event that a dispute arises, we are prepared to preserve your interests and advocate for you through negotiations and litigation.
We provide a wide range of legal services related to buying and selling property, and we are ready to meet your real estate law needs. To speak with one of our experienced real estate lawyers, contact us online or call us at 905-828-2247.