Lessons Learned: Paperwork

Here's an overview of the deluge of paperwork you will need to fill out if you plan to be an owner-builder:

1. Mortgage:

Before getting the first payment in your account you will need to :

• Find a bank that finances owner builders. This isn't obvious. We went with La Caisse Populaire Desjardins. 
• Secure a low interest by visiting the bank 6 months before you will need financing. This will guarantee the current rate and from there, it can only go down. At the same time, get pre-approved for an amount higher than you think you will need.  
• Having a large down payment is very important for building mortgages. If you already own the property, the value of it can be considered the down payment. That is what we did. Yay me for being responsible 8 years ago.
• Gather all your quotes and organize them neatly in a spreadsheet. You can't get financing until you provide this with the bank along with your plans. The bank will not finance furnishings.
• The bank will get an appraisal expert to estimate the value of the home. If the value is less than you are asking for, your financing request will get refused. This shouldn't happen but thought I'd point it out.
• Once the appraisal is received by the bank and everything checks out, you will have a multitude of forms to fill out, including some about your health.
• The bank will keep the equivalent of 10% of your mortgage until you get your occupancy permit. They do this to prevent people for building for years and years. 
• Your first mortgage payment can't be deposited in your account until the lawyer fills out the mortgage papers and that you provide proof of insurance. The next section addresses this issue.
• Call your insurance and find out about construction insurance. They will ask you questions about the size of the house, how you will heat etc. Once you are insured, they will fax the proof of insurance to your lawyer.

2. Legal Mumbo Jumbo:

• If one of you owned the land before building, as was our case, you will need to transfer the property to both your names.
• They also fill out random forms regarding the mortgage itself and you will have to go there in person to sign documents saying you understand the terms of the bank you are dealing with.
• Once they received the proof of insurance from your insurer, they close the deal and you can start relaxing...almost.
• Co-habitation agreement: If one of the parties on the mortgage is bringing more to the table than the other, the lawyer will highly recommend a cohabitation agreement. This is basically a contract that dictates what will happen to the property and house should one of the parties die or if the couple separates. It is very important that you have open communication about this kind of stuff if you want to survive through the building process. Francis and I are very lucky that we were in total agreement and were both looking out for each other's interest. The process is as follows: you will meet with a lawyer as a couple and he/she will explain what you need to decide (there's a long list). You will then meet with a different lawyer individually to make sure the contract is legal and that you both received unbiased legal advice. A lawyer can't represent both parties so it's important you both find someone you are comfortable with. Your cohabitation agreement can become your marriage arrangement without a cost by simply adding a clause in the contract.
• Do NOT believe the lies that having co-habitation agreements or marriage agreements is a sign of eventual relationship failure. It is actually a great way to ensure both parties feel good about their investments and nobody is afraid to get screwed over in the long run. I believe this actually prevents disagreements about financial matters in the future.

3. Permit:

The City of Ottawa is not used to rural life. They complicate every single step in the process for us. BUT..if you play your cards right you will get through it. Here are some tips:

• When applying for your permit, make sure you go through the checklist they have at the front desk. They WILL delay you for not having your fireplace specifications or for not indicating that the exisitng grade is the proposed grade at the corner of your lots (ridiculous when you ahve a 5 acre lot but anyway).
• Be patient. They want your money and the only way they can do it is if they give you the permit...haha...so you'll eventually get it.
• When estimating the value of your house, be very conservative. 100 bucks per square foot is more than enough. They won't start calculating everything..they want your money remember? 
• The only thing that delayed us is the grading plan. It was also a waste of money (over 3000$!) but the city asks for it.
• Once you get the permit, they will provide you with the contact information of the person who will conduct your inspections and a list of inspections that will need to be preformed. Be nice to that person, you will have to deal with them often. We asked for a bilingual inspector because a lot of our contractors are french. We were lucky to land on a very nice young man. Yay.

4. Budget:

• Keep track of everything. 
• Keep track of everything.
• Keep track of everything.

It will come in handy when you want that HST rebate for first time home builders. Or when you wonder where all the money went. Or when you need to find out how much you can spend on the lighting fixtures at the end of your project. Be anal. Use spreadsheets. (with colours) (and formulas). I know this seems obvious but really, go overboard. Keeping quotes in an envelope and jotting down how much you pay contractors is not enough.