What You Need To Know About Buying a Heritage Home
What You Need To Know About Buying a Heritage Home
What is a historic or heritage home?
A heritage home is any house, usually more than 50 years old, that has special historical or architectural significance.
That said, some states and municipalities have their definitions of “historic”; in some cases, structures less than 50 years old can be considered historic if they are exceptionally unique or significant—like Frank Lloyd Wright’s Hollyhock House in Los Angeles, which was built in 1921. That house eventually became the centrepiece of an art park.
Heritage status is defined by a detailed and unique process based on local history and with the participation of municipal governments. While older homes of a certain age are more likely to be designated heritage homes, most are just old houses that don't hold up to modern safety standards.
Historic buildings are formally recognized as having cultural heritage value and may not even be viable as residential properties.
The heritage designation often doesn't take into account what a normal property owner would consider important details like working plumbing systems, electrical systems, or insulation.
Such a property may still be available for sale but historic homes are not bought and sold like your usual piece of real estate.
What differentiates a heritage property from a non-heritage property?
The final decision is usually decided at a city level but it all comes down to the potential heritage homes' level of "special heritage interest". Potential properties are either put forward for assessment by the property owners - for a few different reasons we will expand on later that include tax breaks or other incentives - or designated at a municipal level by government officials.
Renovation limitations
This should come as no surprise if you're planning to buy a heritage property but it gained its heritage designation for its historical attributes and architectural features.
Buying a heritage home doesn't just mean buying a piece of history, it means you agree to preserve the heritage value or interest of the property. To some, this is an exciting proposition, to others, it means taking possession of something that needs to remain the same.
This does not apply to the entirety of the house. If you decide to acquire a designated heritage property or plan to list your home as one with cultural heritage value then you will almost certainly never be able to change its exterior looks aside from repairs - repairs which could require special expertise. Exterior changes to the home will require careful consideration from your local government.
However, when it comes to the interior, you can meet today's building standards without having to deal with special permits. If the heritage property is part of a heritage conservation district then things may get a little trickier.
Heritage properties are deemed culturally valuable by virtue of their rich character and link to history. If you are a prospective buyer, it's very important to discuss renovation limitations to get a clear idea of what you can and cannot change.
Outdated key systems
A new owner shouldn't be too surprised to find that a historical home is lacking in some modern aspects. Heating and plumbing might seem obvious but other things should be diligently checked before the purchase.
For example, if the home was not used in a long time then having a contractor inspect the property to find traces of asbestos or critically faulty wiring. Keep in mind that with the older materials used, faulty wiring can also lead to more dangerous home fires should they occur.
A heritage house, like many older homes, will have high maintenance costs in the beginning until renovations are done. You will need to have the heritage home's structural integrity assessed to make sure that it won't crumble from just a quick trip up the stairs. From a safety perspective, there is a bigger concern than with most other homes on the market.
However, if the home was lived in more recently then that can confirm heating, plumbing, and electricity are at least in a good enough condition to move in.
The buying and selling process
In the same way that owning a heritage home is different from owning a normal piece of real estate, the transfer of ownership is a detailed and unique process.
You will need a real estate agent as well as an experienced registered salesperson to oversee the process and can give the municipality notice about the change in ownership.
A home inspection in the context of a heritage house is more thorough and will come with many caveats. It's not just an old house, heritage properties may not have been easy to maintain because of costs or delays introduced by its legal protection.
What is the difference between a listed heritage property and a designated heritage property?
On your local municipal register, you might find that some of the homes are "listed" properties. This means that the listed property has not been evaluated by the local government yet to determine if it meets the standards of being a designated heritage property.
A designated heritage property holds higher status than a listed one. The owners can receive tax breaks and incentives to preserve the important details that give it historical or cultural value.
With rising property values, a designated heritage home is an invaluable asset not only because of its ties to history but because of the aforementioned incentives. If you're looking to buy a piece of history to preserve, then the designation also acts as proof of the home's special heritage interest.
What is a heritage district?
A Heritage Conservation District is a plan that delineates an area where the homes need to adhere to certain standards to preserve the historical attributes and the heritage value and interest of the area. For some potential buyers, the rich character of these neighbourhoods is an exciting proposition.
It doesn't mean that the neighbourhood is frozen in time but rather that there are limits on what can be done in the heritage district. Each district's specific heritage district plans are usually available through the local government's websites and resources for free.
Is there financial assistance for heritage homes?
Yes, throughout Canada there are grants for the upkeep of historic homes. The House Grants Program in Victoria, British Columbia, for example, gives up to $16,500 per year for ten years to homeowners assisting with restoration and repairs.
There is a list of grants online but do talk to both your real estate lawyer and your mortgage lender to find out about all the current programs you can benefit from.
Buying a heritage home: how do I do it?
The number of special considerations may make it seem like it's not worth the trouble but buying a heritage home can be a positive experience.
It's not just an old house with some stringent by-laws, taking possession of such a property is buying into the history of the area you are living in. That itself is enough for many buyers.
As with most real estate endeavours, one of your first steps - especially considering the possible complexities - is to contact a real estate agent. Though you may think they only work on normal residential properties, their deep network of contacts can smooth out the entire process for you.
Another key part of the team you will be working with is a real estate lawyer that can keep you informed about the legal considerations you will have to keep in mind.
Once you find a property deemed culturally valuable and intend to live in it, you will have to have a contractor inspect the home and talk with them to find a way to lower maintenance costs in the long run, bring up the property's safety standards, and have the home's structural integrity assessed.
After you discuss renovation limitations with your real estate lawyer; confirm heating, electrical, and plumbing systems meet your standards; and secure funding by looking over the incentives and special funds available for owners of heritage properties; then it's time to put an offer forward.
At this point, this is where your agent and lawyer will guide your forward. Since much of the process is very local and operates at a municipal level in many areas, a new owner will need to get familiar with their local laws - like when and how to give municipality notice if you decide to sell.
Is it worth it?
That is entirely dependent on you and the opportunities available around you. Many older homes that are not on your local municipal register can have heritage value or interest. These homes will not need as many hoops to jump through initially and you may even be able to classify them as designated heritage homes if you play your cards right - but there is no guarantee.
Heritage homes often fail to meet today's building codes and standards and will require special expertise to get into shape which means a lot of concessions to make during the selling process as things that would normally lower the price of a property can be justified as part of preserving an invaluable asset.
From a safety perspective, some issues will take careful consideration to resolve given the limits on renovations.
Unless you love the property for what it is or plan on taking advantage of the grants to eventually sell the home, then it may be best to look for another type of property. If you're up for the challenge and its rewards though, time to pick up the phone.
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