With the rising cost of real estate, it is becoming even more attractive to own a property that provides you with shelter and an income supplement. After all, this is a great way to pay down your mortgage debt and grow your asset even more quickly.
However, like with many things real estate, there is a little more involved than converting a portion of your home, opening your doors and offering it for rent. Did you read about the owner of a rooming house in Etobicoke who was recently sentenced to three years in prison and will have to pay a fine in connection with fire that claimed one person’s life more than three years ago? The landlord was found guilty of criminal negligence causing death, criminal negligence causing bodily harm, and four counts of criminal mischief because he failed to follow proper fire code regulations at the home. Here's the CTV News article Landlord Given 3 Year Sentence After Fatal Fire.
There are several aspects to consider when owning a multi-unit dwelling - from safety to building permits to zoning to taxation issues. Click here for a handy Homeowner’s guide that tells you exactly what you need to know. The guide is provided by the Landlord Self-Help Centre, which is a not-for-profit community legal clinic that provides support to Ontario's small-scale landlord community. In addition to the guide listed above, the group provides a wealth of information for landlords.
In the province of Ontario, rules surrounding the leasing out of a suite in a private home are governed by municipality, and future landlords can expect to encounter numerous different organizations and groups. They function to regulate and standardize the construction and/or upgrading of second suites as well as the renting of them. While it may seem like a bit of a bureaucratic headache at the outset, these regulations, standards and best practices exist to provide an optimum, safe living environment for you and your tenants, as well as mitigate landlord liability through due diligence.
While the end goal is generally the same, it is important to note the differences in processes depending on whether you already have a second suite, or if you are looking to build one (the processes are detailed in the handbook we’ve referenced above).
Landlords should anticipate interactions with Building Departments, Municipal Licensing and Standards, Fire Services, the Electrical Service Authority as well as various community agencies. Very often a second suite is a basement apartment, but may also occur when a tenant occupies a separate floor or another part of the house (i.e. the back part).
In short, for a second suite to receive authorized status, it must meet the following criteria:
• residential zoning requirements;
• property standards;
• occupancy standards;
• health and safety requirements; and
• fire and electrical codes
Creating a New Suite?
There are five requirements to be met before you actually build a second suite. Before you take on the project, determine if your property meets these criteria:
1. The principal residence must be at least five years old.
2. The house must be detached or semi-detached.
3. The exterior façade of the house cannot be significantly altered. For example, adding a second and separate front door may not be permitted.
4. The second suite must occupy a smaller area than the rest of the house and it must be a single, self-contained dwelling. It must have a separate entrance and contain proper kitchen and bathroom facilities.
5. The property must meet parking requirements (except in parts of the former City of Toronto, where provisions have been made to acknowledge limited availability of parking, there must be space for at least two vehicles.)
You may be wondering about things like Fire Safety and Building Permits. As a baseline, the conversion of a home from a single unit to two units requires a building permit. In doing so, you will be subject to consultation with the Building Division, which will help address your compliance to Ontario Building Code, residential zoning by-laws and property standards, fire code and other safety (i.e. electrical etc.) issues. These helps you determine what (if anything ) you need to upgrade or alter to comply with safety regulations.
In an existing suite, the landlord will need an inspection to receive Fire Code and other compliance. It is worthwhile to determine what any deficiencies might be in advance by reviewing the Ontario Fire Code.
It’s important to note that it is recommended that landlords be proactive by arranging an inspection with the city themselves. Neighbours or tenants can request one too, which usually happens as the result of a complaint. The issue here is that the onus is on the landlord to ensure that all safety standards are met with an existing suite. If you have a tenant occupying an unauthorized suite and something happens (i.e. fire, flood etc.) you will be liable. Inspections are a two-part process that involves an initial visit from Municipal Licensing and Standards.
The questions they answer are:
• Is the property permitted to have a suite within the existing residential zone?
• Does the dwelling fit within basic conditions?
• Does the property have all the right building permits?
• Does the suite meet the City's property standards?
Once they’ve determined that your suite is habitable, they refer you to the City of Toronto Fire Services for Fire Code compliance.
What if I Don’t Pass?
If your suite does not meet the compliance issues, landlords are faced with three options: they can renovate as necessary to meet the criteria, address zoning variances through the Committee of Adjustment, or they can simply close the suite down.
Do I Need a Permit?
As a landlord, you will no doubt be doing maintenance and repairs to your suite over time. Minor repairs (i.e. things that don’t require any major structural work) like replacing doors or windows, siding, re-shingling a roof, painting ,etc. etc. don’t require a permit.
If you are doing renovations, changing the use of a space, building a balcony, deck or garage or modifying things like heating or plumbing systems etc. then you will need a permit. A comprehensive list is available in the second suite guide we’ve referred to above.
Do you have a second suite or are considering altering your property to accommodate one? Or maybe the existence (or potential existence) of a second suite is part of your must-have list in your property search? Either way, as with all other things real estate, knowledge is power. Being proactive and prepared when making a purchase or investing in your future is of immeasurable value, in support of pragmatism and peace of mind.
With several decades of experience, as well as a sound, thorough knowledge of the myriad of information that surrounds home ownership from all sides, urbaneer welcomes the opportunity to counsel our clients to help them find properties that best suit their goals today and tomorrow as well. We’re here to help!
~ Steven and the urbaneer team
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