March 27th, 2012

Is My Basement Apartment Now Legal?

Thousands of landlords and potential landlords all over Ontario have emailed the Ontario Landlords Association asking for help and clarification on the Strong Communities Through Affordable Housing Act

This Act seems to pave a way for small private residential landlords across Ontario to create legal, ‘retrofit’ units, they could rent out without fear of being shut down my municipal bylaw officers.

Or Maybe Not…

There is excitement and there is also a whole lot of confusion going on.

Are basement apartment now legal?

If not, how exactly can landlords fully protect themselves by making their units legal?

If The Government Won’t Give Me a Clear Advice Where Can I Get It?

We asked Toronto real estate lawyer and consumer advocate Bob Aaron for help.

For years, Bob’s Toronto Star columns have been “MUST READ” for all landlords, big and small.  Bob is passionate about the industry and truly the “Go To Source” for legal questions for landlords and property investors in Ontario.

Bob Aaron’s Toronto Star Article

On Friday, March 16 Bob Aaron wrote a very helpful article on the issue.  In a Toronto Star article  he explained:

Achieving a “legal” basement apartment involves five separate issues:  local bylaws, fire code, building code, electrical safety requirements, and registration.

Ontario Landlords Association Members Loved Bob’s Column…but  hundreds of emails sent in asked for more advice and more clarification

The OLA contacted  Bob Aaron with our questions and he was amazing in taking a passionate approach to replying and trying to help our members.

The OLA/Bob Aaron Interview

OLA Member Question:

I bought a duplex the real estate agent said had a  retrofit basement apartment.  I’m confused, does that mean I’m not totally protected?

Bob Aaron:

In the very complicated world of basement apartments, the use of the word “retrofit” is virtually meaningless.   Technically the term only refers tt the retrofit provisions of the Fire Code.  A basement apartment may comply fully with Fire Code, but may not comply with local zoning bylaws, parking requirements, Ontario Building Code, or electrical safety regulations.    The questions to ask the vendor or the real estate agent are: 

• Do the local bylaws permit you to have a basement apartment?
• Does the apartment comply with the fire code?
• Does the apartment comply with basic building code requirements?
• Does the apartment comply with basic electrical safety requirements?
• Has the apartment been ‘registered’?

OLA Member Question:

It is really true if the unit was rented out before 1995 I don’t need to worry about bylaw inspectors?  How can I prove it was rented out before 1995 if I’m challenged?

Bob Aaron:

In 1994, the NDP government in Ontario said that property  owners could ignore local bylaws that prohibited second dwelling units in houses if certain conditions were met.  The same year,  the province set new Fire Code rules for basement apartments. A deadline was established for all existing basement apartments to upgrade to the new fire code. Upgrading to comply with the new fire code is called a “retrofit,”  and all basement apartments, whether legal or illegal, MUST comply with Fire Code.

In 1995, the provincial Conservative government gave municipalities the power to enforce their bylaws regarding basement apartments. A grand-fathering clause says that apartments existing before November 1995 do not have to meet local bylaws – but that relates to zoning only, and not the other requirements regarding fire, electrical and building code.    But the rules changed on January 1, 2012 – see explanation below. 

OLA Member Question:

As a potential investor, what is the best way I can protect myself?  I don’t want to pay the premium for a basement apartment to rent out, only to find myself shut down a few months later.

Bob Aaron:

Any investment, real estate or otherwise, involves an element of risk.  The vast majority of the hundreds of thousands of basement apartments in Ontario do not comply with some or all of the necessary requirements to qualify as totally compliant and legal.  The problem is that many real estate agents do not understand the issue and treat illegal basement apartments as having the same value as legal ones. 

OLA Member Question:

I’m in Mississauga.  I read the provincial government is forcing all municipalities to create rules for making basement apartments legal.  Is this true?  Do you think it’s a good idea?

Bob Aaron:

Here’s where it gets complicated –  In 2010, the Province of Ontario introduced Bill 140: Strong Communities through Affordable Housing Act, 2011. Bill 140 amended various sections of the Planning Act, which now require municipalities to implement official plan policies and zoning by-law provisions that will allow basement apartments (second units) in detached, semi-detached and townhouses, or as accessory units. The changes to the Planning Act came into effect on January 1, 2012, however the Province has not specified a deadline by which municipalities are required to bring their respective planning documents into conformity with Bill 140.

Ontario municipalities are now required to initiate a policy review to implement policies in their Official Plans and performance standards in their Zoning By-laws.

OLA Member Question:

Until the Official Plans and zoning bylaws are amended, the effect of zoning bylaws which appear to prohibit basement apartments in the face of the new legislation is uncertain.

The question now is:  can a municipality enforce its old zoning bylaws against a post-1995 basement apartment in the face of Bill 140 when that municipality has not implemented changes to its official plan and zoning bylaws to permit basement apartments?  At the moment we seem to be living in a grey zone where the answer is unclear. 

-I’m thinking of investing about $20,000 to make a two bedroom basement rental in my house.  Before I spend that kind of money where can I get information about what the rules and laws are?

Bob Aaron:

The City of Toronto has prepared an excellent guidebook entitled “Second Suites – An Information Guide to Homeowners.”  It is available at http://bit.ly/GRhHe1.   It notes that provisions permitting second suites throughout the City of Toronto came into effect in the summer of 2000.   City homeowners are allowed to have a second dwelling unit in any single or semi-detached home, and in some rowhouses. 
For a second suite to qualify as an authorized unit, it must meet residential zoning requirements, property standards bylaws, occupancy standards, health and safety requirements, and fire and electrical codes. 

Another piece of good advice is to consult a qualified professional planner, engineer or architect to guide you through the conversion process. 

The Ontario Landlords Association thanks Bob Aaron for his time and advice.

To contact Bob Aaron for your real estate needs visit his website at www.aaron.ca or email him at bob@aaron.ca  

He’s highly recommended!