Can I Have a Basement Apartment?


If you are thinking about converting your basement into a secondary suite, there are many benefits. The added value to your home, the extra income from a rental, and the fact that they provide affordable housing to others are all attractive features.

There are also many things to consider.

Basement apartments - also known as granny-suites, in-law suites or secondary suites - require planning to ensure you are optimizing the benefits. For example, the space must conform to zoning, building and fire code requirements. Your home must be located in a zone that allows for secondary suites. It is also important to confirm the suite meets fire regulations, like having a separate exit, allowing for adequate fire separation, and adequate size and heights in each room. Lerners, together with your city’s Planning or Building Departments, can help you determine whether your plans conform to these requirements.

The next step is contacting your insurance company to inform them that you are adding a basement apartment to your home. They add extra risk to the property, so expect your insurance premiums to go up as a result. If you do not inform your insurance company, they may refuse to approve your claim should damage occur to the home.

During the construction phase, you should also consider whether your space is safe and healthy. Doing this means ensuring there is sufficient natural light, the ceiling is high enough, there is adequate heating, ventilation, thermal and sound insulation, good fire protection and reliable heat and smoke alarms.

It is important to recognize that a basement apartment, by adding value to your property, may also raise your property tax. Any rent earned from tenants will also need to be declared as income on your tax returns. Reasonable operating expenses are eligible as deductions, however.

Finally, some cities, including the City of London, have introduced by-laws specifically related to rental units. Depending on your location, you may need to secure a “landlord licence” prior to renting to a tenant.

Whether you are just starting to think about adding a rental suite, or if you have one already, the experienced lawyers at Lerners are happy to discuss your needs and how we can help you, in the words of HGTV’s Scott McGillvray, “start taking cheques to the bank”.


Topics:  Renovations, Rental Income

Published In: Insurance Updates, Residential Real Estate Updates, Zoning, Planning & Land Use Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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