Is That Apartment Legal?

The City of Toronto has a love-hate relationships with basement apartments: while they recognize the need for housing and want to encourage density, they also want to ensure the safety of basement dwellers. While laws have flip-flopped over the years, at this point, the City of Toronto permits second suites in all detached and semi-detached houses, subject to a whole bunch of of by-laws and rules.

A second suite is defined as a self-contained rental unit in a detached or semi-detached house. In order to be considered a  ’legal apartment’, the apartment will need to meet certain zoning, property, occupancy, health and safety, fire and electrical standards.

Creating a New Second Suite

If you’re considering adding a second suite in your Toronto home to help offset some of your mortgage costs, there are a number of requirements that must be met:

• The principal residence must be at least 5 years old
• The house must be detached or semi-detached (there are some additional rules and exceptions for rowhouses)
• The exterior facade of the house cannot be significiantly altered
• The second suite must be smaller than the rest of the house and be self-contained with its own kitchen, bathroom and entrance
• The property must meet parking requirements (except in the former city of Toronto, where they recognize the limited parking available)

If there’s a small discrepancy in any of the above requirements, you may be able to apply to the Committee of Adjustments for a minor variance (in other words, exception) – but note this will take time and likely cost some $$.

To ensure that your apartment is legal, you’ll also need to:

• Ensure you comply with zoning by-laws (best to confirm with the city for any specific by-laws or exceptions for your street)
• Apply for a city building permit and pass all inspections (complying with the Building Code)
• Meet all electrical safety codes via an inspection with the Electrical Safety Authority (for example: grounded electrical plugs, proper use of extension cords, GFCI bathroom plugs, proper receptacle covers, main electrical service in good working condition, etc.)
• Meet fire safety standards (for example: adequate fire separation between the units, interconnected smoke alarms, appropriate means of egress (escape), fire extinguishers, etc.)

Buying a House with an Illegal Second Suite

If you’re in the market for a house with more than apartment (a.k.a. duplex or triplex), you’ve likely seen the words: “Seller and Agent do not warrant retrofit of basement apartment” on an MLS listing. Translation: that basement apartment is probably not legal.

Reality check: 80% of Toronto’s basement apartments don’t comply to all the rules and wouldn’t likely be considered ‘legal’. Here are the risks you need to be aware of:

The Risks

• Anyone can make a request to the city to have your second apartment inspected (e.g. tenants, neighbours, an angry ex-girlfriend). Getting caught with an illegal apartment could result in you having to transform the home back into a single family dwelling, or may result in a lot of time and expense to legalize the apartment.
• Your lender may not recognize the income associated with an apartment that isn’t considered legal
• You can be sued if a flood or fire results in an accident or death in the illegal second suite – we would ALWAYS recommend that a homeowner meet electrical and fire safety standards for any second suite.
• Make sure your insurance company knows what’s really going on in the house – NEVER lie to your insurance company.

If you’re considering buying a house with an illegal second apartment, balance the risks and rewards. Should you go through the motions of getting the apartment legalized? Not rent out the second suite? Or maybe just buy a single family home? Whatever you decide, make sure you’re working with a real estate agent who knows the rules and requirements.

Click here for the City of Toronto Guide on legal apartments.