Canadian Consumer Handbook 2008-2009

Housing

Buying a Home

Experts say that most consumers spend more time on a visit to the grocery store than they do considering the biggest purchase of their lives—their home.

The best way to shop for a new home is to prepare a "must-have" list. It is recommended that you spend plenty of time inspecting all the aspects of any home that you're serious about buying.

Figure out what you can afford, based on a mortgage payment of up to 30 percent of your income. Talk to someone at your bank, then compare mortgage rates, terms and conditions at a number of financial institutions. Mortgages vary widely. You can get a good idea of current house prices in neighbourhoods you are considering by looking at house listings in the newspaper or by searching the Multiple Listing Service or the websites of for-sale-by-owner companies, which help homeowners advertise their home but are not allowed to actually sell it.

Unless you're in a building trade, you won't necessarily see the faults in a home you're considering. Hire a competent home inspector. Ask friends and neighbours for references. Think seriously about the advice the home inspector offers. He or she should always provide a written report. Keep in mind that home inspectors are not regulated and they are not liable for giving you incorrect information. To find an inspector, contact the Canadian Association of Home and Property Inspectors (see the "Housing" section).

For more information on home buying, go to the Buying a Home section of the Canada Mortgage and Housing Corporation website.

When you have a complaint about a real estate agent, contact your provincial or territorial consumer affairs office or real estate regulator.

New Homes

Talk to your local home builders association for general information (to find the one nearest you, go to www.chba.ca/FindMembers/index.php to search the list of members of the Canadian Home Builders' Association). Many home builders associations provide brochures and sample contracts to help consumers understand the market.

Federal consumer and housing ministries and their websites are also helpful. For information on maintaining a new home, you may wish to purchase the Homeowner's Manual produced by the Canada Mortgage and Housing Corporation.

Condominiums

You may be considering a condo, but if you've never lived in one, you should check into all the restrictions and rules before you buy. Ask to see a copy of the corporation by-laws; they may include very specific conditions, such as whether you may put in a garden or hang seasonal lights outside. Talk to people in the community. Find out about maintenance fees and how often they increase. Check whether there is an adequate reserve fund in place for repairs and maintenance of major items, such as roofs, driveways and parking lots. Just as you should do when purchasing a house, have a home inspection done before purchasing a condominium.

See also the Canada Mortgage and Housing Corporation's Condominium Buyers' Guide (scroll down the page and click on the title of the guide).

Renting

Many of the same issues that arise when you are buying a house or condo also come up when you are looking for rental accommodation. You need to make sure that it meets your needs at a price you can afford and that it is safe and well maintained.

In addition, you will want to read the rental agreement carefully, to find out about the rules that tenants must follow and what the landlord is required to do for you. Ask about the security deposit: whether there is one, what the terms are for getting it back when you move and whether you will be paid interest. Landlord and tenant requirements vary across Canada so it is important to find out about the situation where you plan to live, particularly if you are moving to another province or territory.

Canada Mortgage and Housing Corporation has an extensive section on its website about renting, with tips, information, worksheets and sample letters that will help you during the rental process: www.cmhc-schl.gc.ca/en/co/reho/yogureho/fore/index.cfm.

Home Renovations

There is no such thing as a small, simple renovation project. The process takes time and effort. It's also messy. However, the more planning and care that goes into the renovation in advance, the better your chances of having things turn out to your satisfaction.

• Understand your own abilities and the amount of time that you can spend on the project. This will help you decide what kind of professional help you should look for, ranging from an architect or general contractor, who will take charge of the project from beginning to end, to a one-person local construction company.
• Write a full, detailed list of the things that you want to achieve. If you change your mind part way through the project, the costs will also change.
• Check with your municipal building inspection department to find out which permits you'll need (this is not your contractor's responsibility unless that is spelled out in your contract) and with your insurance company to discuss any extra insurance requirements that will add to your final cost.
• Make a list of potential suppliers to interview. Ask relatives, friends and neighbours as well as local business associations for recommendations.
• Some professional organizations, such as architects associations and building associations, keep a list of suppliers who specialize in renovation work.
• Check with your local Better Business Bureau or business association to see whether any complaints have been filed against any firm that you are thinking of hiring.
• Contact at least six professionals by telephone to find a minimum of three to interview.
• Ask for references and check that they are valid.

Interviews are a two-way conversation. The supplier should ask you a lot of questions about what you want. In turn, you should ask the supplier about similar projects he or she has handled, the time required for the job, whether there will be subcontractors involved, what the stages of progress will be, and the permit requirements.

You should never be given a quote at the interview. Ask the supplier to send you a written estimate of all costs, including labour and any extra charges. Review all the quotes carefully. They should outline your project and provide at least a partial cost breakdown.

Don't sign a contract until you have fully reviewed and are satisfied with all the terms of the contract and are sure that the contractor is capable of meeting your needs. Never allow work to proceed until you have fully reviewed, understood, agreed to and signed the contract. (See "Contracts," for more tips on signing contracts.)

The contract should include the following information:

• the type and amount of work to be done.
• who is to complete the work (including a list of any subcontractors and who is responsible for their payment and when).
• the total cost.
• the start date and date of completion.
• who is responsible for clean-up afterwards.
• the name and address of the supplier and your name and address.

On major projects, attach to the contract a list of the sections of work to be done and their completion dates . A payment schedule should also be part of the contract.

Keep the number of payments to a minimum and check on construction liens legislation in your province or territory. The law may require you to hold back a percentage of the payment until the date when the major work is finished (what's known as the substantial completion date). You'll be asked to sign a completion certificate. Don't sign it until the work is finished and you're satisfied with it. If a contractor asks for a deposit, he or she may have to have a provincial or territorial licence. Check with your provincial or territorial consumer affairs office.

For more information on what to do when hiring a contractor, visit the Get It In Writing website, run by the Canadian Home Builders' Association.

Door-to-Door Home Repairs

Sometimes salespeople come to your door offering a deal on roofing, driveway resurfacing, or furnace inspection or repair, because "we just happen to be in your neighbourhood." Usually they insist that the contract must be signed immediately to get the special price.

This is a high-pressure sales tactic. Don't fall for it. If you were thinking of having the work done anyway, ask the salesperson for local references. Obtain quotes from other suppliers as well.
Although the majority of sellers are honest, some are not. The seller may ask for a deposit and then never return to do the work, or the work he or she does do may be substandard. Unless you have personal references, you won't know what you're really buying until your money is gone. (See also, "Door-to-door sales".)

Your province or territory may require door-to-door salespeople to be licensed and bonded, and may allow a cancellation (or cooling-off) period, during which you may cancel the contract for any reason. For more information, contact your provincial or territorial consumer affairs office.