You can sell a home with an outstanding building permit in Ontario, but doing so without disclosing it is a serious mistake that can derail your deal at closing. An outstanding permit — sometimes called an open permit — is a building permit that was issued and work was performed, but the final inspection was never completed and no final certificate of occupancy or completion was issued. From a legal and practical standpoint, outstanding permits create problems for buyers, lenders, and title insurers that must be addressed before or at closing.
What Is an Outstanding (Open) Permit?
A building permit has two stages: issuance (authorizing the work to begin) and final inspection (confirming the work was completed to the Building Code standard). Many homeowners pull permits, do the work, and then never call for the final inspection — perhaps because the work didn't fully comply, because they lost track, or because they assumed it would sort itself out. It doesn't. The permit stays open indefinitely in the municipality's system.
Common sources of open permits in GTA homes: basement finishing, additions, deck construction, HVAC replacement, electrical panel upgrades, pool installation, and detached garage construction. Toronto maintains an online building permit search — buyers, lenders, and title insurers routinely check it. Open permits will be found.
Why Outstanding Permits Are a Problem for Buyers
An outstanding permit signals to buyers and their professionals that:
- Work was done but never confirmed to meet the Building Code
- The work may have deficiencies that were never identified by an inspector
- The title to the property carries an encumbrance that may need to be resolved
Title insurance: Title insurers typically cover known title risks for a premium. Some title insurers will insure over an open permit (providing coverage for losses arising from it), but at additional cost and subject to their underwriting criteria. Others won't insure over permits involving structural, electrical, or fire safety issues. If the buyer's lender requires title insurance that covers the open permit, and the insurer won't provide it, the deal can fail.
Mortgage financing: Most major lenders require title insurance as a condition of advancing the mortgage. If title insurance isn't available for the property due to the open permit, the lender won't fund. The buyer needs the lender to fund to close the deal.
Buyer's due diligence: Any buyer with a competent agent will find the open permit and will expect it resolved — either by you before closing, by a price reduction to account for the resolution cost, or by a holdback of funds at closing until the permit is closed.
Your Options as a Seller
Close the permit before listing: This is the cleanest approach. Contact the municipality's building department, request an inspection for the outstanding permit, and get the work inspected. If the work complies with the applicable Building Code (the code in effect at the time the permit was issued), the inspector finalizes the permit and issues a certificate. You then have no open permit issue to disclose.
If the work doesn't comply — the inspector finds deficiencies — you'll need to bring the work into compliance before the permit can be closed. This may involve reopening walls, upgrading electrical, or adding fire separation. Get a building inspector or contractor to assess the deficiencies first, then decide whether to remediate or price the property to reflect the outstanding issue.
Disclose and price accordingly: If closing the permit is impractical before listing (the work involved in compliance is substantial), disclose the outstanding permit in writing and price to reflect the cost the buyer will incur to resolve it. Buyers purchasing at a disclosed discount are taking on a known risk, which reduces your liability compared to selling without disclosure.
Work out an arrangement at closing: In some transactions, the parties agree to a holdback — a portion of the purchase price held in trust at closing until the permit is closed post-closing. This requires legal documentation through both lawyers. Some buyers are willing to deal with closing the permit themselves in exchange for a sufficient price adjustment; others want it resolved before they complete the purchase.
How to Find and Close an Outstanding Permit
Most Ontario municipalities have permit search tools online. In Toronto: search the City of Toronto's Active Building Permits database at toronto.ca/building. For other GTA municipalities, check the municipal website's building department section. Your real estate lawyer can also conduct a permit search as part of their title review.
To close a permit: call the municipality's building department, provide the permit number (or they can search by address), request a final inspection, and arrange access for the inspector. The inspection is typically free or low-cost. If work is required to meet code before finalling, the cost depends on the scope — minor electrical or smoke alarm upgrades might cost $500–$2,000; structural remediation can cost far more.
Disclosure Is Mandatory
An outstanding permit is a condition that affects the property's title and the legality of the work performed. Under Ontario real estate disclosure standards, you are required to disclose known outstanding permits to buyers. Failing to disclose a permit that the buyer's title search will find anyway — and that becomes a closing issue — damages your credibility and can expose you to claims that you attempted to conceal a material condition.
See our complete guide on documents required to sell a home for a complete checklist of what to gather before listing, including permit records.
FAQ
How do I find out if my home has open permits?
Search your municipality's building permit database using your address. In Toronto: toronto.ca/building has a public permit search. Most other GTA municipalities (Mississauga, Brampton, Markham, Vaughan, etc.) have similar online tools. If you can't find it online, call the municipal building department directly with your address. Your real estate lawyer will also conduct this search as part of the title review.
Who is responsible for closing the permit — me or the buyer?
The seller is typically expected to close outstanding permits before closing, or the issue is priced into the sale. Buyers can agree to take on the permit closure themselves, but this requires a clear written agreement in the APS and usually a purchase price adjustment. Most buyers don't want to inherit permit problems — they want a clean title.
Can an open permit from 20 years ago really affect my sale today?
Yes. Municipalities have no statute of limitations on building permits. A permit opened in 2003 for a basement renovation that was never finalled is still open today, will appear in a permit search, and will be raised by the buyer's agent, lawyer, or title insurer. The age of the permit doesn't reduce its relevance to the current transaction.
What if the work done under the old permit no longer exists — can I just close it that way?
If the physical work covered by the permit has been demolished or substantially changed, explain this to the building department. They may be able to close the permit administratively or require a site visit to confirm. Every municipality handles this slightly differently — call the building department and explain the situation before assuming the permit can't be closed.
Is an open permit the same as unpermitted work?
No. An open permit means work was started with a permit but never inspected and finalled. Unpermitted work means no permit was pulled at all. Both create disclosure obligations and title issues, but they're resolved differently. An open permit has a paper trail through the municipality and can usually be finalled through the inspection process. Unpermitted work may need to be retroactively permitted — or disclosed and sold as-is with appropriate price adjustment.