I know a thing or two about real estate, right?
Fourteen years in the industry, hard-working lad, top agent in the brokerage, and memory like an elephant.
I’ve always maintained that knowledge is the key to this business. Sure, sales is part of it, as is actually finding people who want to work with you, but knowledge is, and always will be key.
So what if I told you that I have absolutely, positively, zero idea what makes a basement apartment legal in the City of Toronto?
It’s true. I’ll admit it.
A client of mine read Friday’s blog post, and on Saturday, said, “Great blog on Friday, that was really eye-opening! But what must you actually do to make a basement apartment ‘legal,’ as you say?”
This was one of those moments where you basically revert back to a child, and do what you saw the cartoons do on TV. Like when you’re embarrassed, and you put your hands in your pockets and kick imaginary pebbles.
So I did what any cat, fox, or bear would do, if it were animated in the 1980’s:
That pretty much sums it up.
If a sound accompanies my “shrug,” it would have been something like “Iaaaaaaaauuuuunoh.”
What can I say, I don’t know everything.
I don’t know what must take place for a basement apartment to be legal, but I do know the following:
1) It costs a lot.
2) It takes a ton of time.
3) Many areas of government are involved.
4) It rarely goes well on the first attempt.
5) Very few people even bother trying.
This might be the only place in life where we can tell our kids, “It’s not worth even trying.”
Sorry for my cynicism, but if you don’t agree, after reading Friday’s blog, then you’re rich, have found the way to get 38 hours out of a 24-hour day, know people in government, and are the single-most patient man or woman on the earth.
So, since I don’t know what’s involved in making a basement apartment legal, I will provide you with my “go-to” for when a client asks me.
Back in 2012 when Richard Silver, now of Sotheby’s, then of Bosley, was the President of TREB, he sent out a letter to all agents which I immediately printed and kept on file. No, I didn’t think to “copy” and put into a PDF; I actually printed it, and put it in a file called, “Knowledge,” which, no word of a lie, I had. It was full of articles from lawyers, inspectors et a. Things like, “What’s the difference between a Condo and a Co-Op?” And yes, Google had been invented back in 2012, but I remained old-school.
Luckily that is all in the past, right?
So here’s the letter from Mr. Silver in its entirety:
LETTER TO TREB MEMBERS FROM PRESIDENT RICHARD SILVER
March 2, 2012 — As Greater Toronto REALTORS we recognize that in comparison to other world cities, ours is a clean, safe and affordable place to live, and its allure means that we’ll continue to see greater intensification in the years ahead.
Toronto’s popularity is reflected for example, in the condominium market, which currently has more buildings under construction than in any other city in North America. Basement apartments also play an important role in meeting demand for housing throughout the Greater Toronto Area and if you have ever listed a property with one, you’re probably familiar with the “Seller does not warrant retrofit” clause. Second suites can cause confusion for homebuyers and REALTORS alike, but this doesn’t have to be the case.
According to noted home inspectors Carson Dunlop, achieving a “legal” basement apartment involves five areas of consideration: bylaw permissibility; compliance with the building, fire, and electrical safety codes; and registration.
In short, if a listing indicates that a property has a retrofit basement apartment, it must meet municipal bylaw requirements, have a Certificate of Compliance to verify that it has passed fire and electrical inspections, and be registered with Municipal Property Standards. Additionally, if it is newly constructed, it must meet Building Code requirements.
Identifying whether a municipality’s bylaws permit basement apartments and if any special conditions apply is the first step in the process.
Since 1995, municipalities have had the authority to enforce their bylaws with respect to basement apartments; however, units that existed prior to November 1995 are exempt from meeting local bylaw requirements.
The Building and Fire Codes are related in that the Fire Code is a subset of the Building Code. There is, however, an important distinction between them. The Building Code, which prescribes minimum requirements for the construction of buildings, for the most part applies only to the day the house was built, not retroactively. The Fire Code, which prescribes construction and safety issues related to how a building is required to perform should it catch fire, does apply retroactively.
In 1994, the provincial government set new Fire Code rules with which all basement apartments, new and existing, must comply. A unit upgraded to comply with the Fire Code is called a “basement retrofit”. The fire department must inspect all basement apartments, and when any deficiencies have been corrected, as is required, it will issue a certificate to verify compliance.
The Fire Code involves four key areas of compliance: fire containment, means of egress, fire detection and alarms, and electrical safety.
Fire containment refers to a building’s ability to contain a fire in the unit where it started. Walls, floors, ceilings and doors are rated based on how long they will survive a direct fire before burning through.
The typical requirement is a rating that affords a 30-minute separation between the units. Drywall and plaster ceilings for example, are acceptable but they must be continuous so that joists are not exposed in any room. By contrast, suspended ceilings are not acceptable.
Means of egress refers to the occupants’ ability to exit the house. Ideally, units should have their own exits. Units that share a common exit are allowed if the common exit is ‘fire separated’ from both of the units with a 30-minute rating. If it not rated as such, it can still be used provided that there is a second exit from each unit and the fire alarms are interconnected.
To be considered an acceptable second exit, a window must have an opening of at least 600 square inches, with the smallest dimension being 18 inches; the windowsill must be within three feet of grade; and basement window wells must extend three feet out from the house wall, to allow room to crawl out.
The fire detection area of compliance requires that all units have smoke alarms. Smoke alarms do not have to be interconnected unless the fire separation to the common exit area does not have a 30-minute rating. Some municipalities may also require carbon monoxide detectors.
Electrical safety refers to the required inspection by the Electrical Safety Authority.
As with the fire department’s inspection, deficiencies that the Electrical Safety Authority identifies must be addressed. In general, an apartment’s minimum ceiling height must be 6 feet 5 inches; its entrance door must be at least 32 inches by 78 inches; bathrooms require either a window or an exhaust fan; and if there is a parking spot for one of the units, there must also be a parking spot for the other unit.
Once bylaw and code requirements have been met and certified, homeowners can register the basement apartment with Municipal Property Standards.
Bear in mind that if your clients are planning to construct a basement apartment they must also apply for a building permit and comply with today’s Building Code.
Representing a house as a two family property requires that you verify it is registered with Municipal Property Standards. Failure to comply can result in a $25,000 fine and one-year jail term.
For more information on basement apartments contact your client’s municipality.
Richard Silver, President
Toronto Real Estate Board
The “Certificate of Compliance!”
Also known in real estate circles, simply as “The Certificate.”
If you’re touring a 5-plex that’s up for sale, you’ll ask the listing agent, “Is there a certificate?” You needn’t say more. He or she knows what you’re after.
If there’s a 3-bedroom semi-detached with a beautiful 1-bed, 1-bath basement, bringing in $1,800 per month, you’ll undoubtedly want to know how much “the certificate” adds in value to the home.
And that’s the kicker here, folks. Buyers need to consider whether they even want the apartment to be legal.
I know, that sounds odd, but let me explain.
Let’s say that 3-bedroom semi-detached home that I alluded to above, with the $1,800 per month tenant (that covers about $350,000 in monthly mortgage costs, FYI), has a legal basement apartment. What would it cost, compared to the same property with an illegal basement apartment?
It has yet to really be mentioned in either Friday’s blog, or today’s, neither in the blogs or the comments, so let me spell it out here as I think it’s the perfect time to tell those who don’t already know: the City of Toronto is turning a blind eye to illegal basement apartments.
Because we have a housing crisis.
And if the city were to shut down 100,000 illegal basement apartments tomorrow, we’d all be worse off.
So then really, what do you surmise the difference between and illegal basement apartment, a legal basement apartment is in the city of Toronto?
If that semi-detached was up for $1,200,000 with an illegal apartment, and the exact same unit next door was worth $1,300,000, both with $1,800 coming out of the basement every month, would you choose to pay the extra hundred grand?
Many of you will simply look at the cost involved with turning that illegal basement apartment to a legal one, and that’s fair. But we don’t always know. Despite the figures provided in the Friday blog post (which was for a new unit), it’s always been like trying to hit a moving target.
You might find an illegal unit that could become legal by simply widening the bedroom window (digging out, installing a new sill, affixing a new window), adding a couple of smoke detectors and CO2 detectors, putting a fire extinguisher in the hall closet, and filling out the requisite paperwork.
Or, you could go to all that trouble, only to have the unit inspected, find out you have to spend massive amounts of money, and in the process, have put a target on your back by alerting the City of Toronto to your unit.
Are the illegal basement apartments in the city better left as our collective dirty little secrets?
So let me ask two questions for the readers:
1) For those of you that have illegal basement apartments: would you consider trying to go after “the certificate,” and if not, or if so, why?
2) For the rest of you, which of the four areas of compliance ( fire containment, means of egress, fire detection and alarms, and electrical safety) do you find the most cumbersome?
Fun times on an otherwise uneventful Monday…Back To Top Back To Comments