
So you’re looking to buy a home in Brampton with a separate basement apartment to lease out for extra income, but you have no clues as to the legalities of the basement. What exactly does “Vendor does not warrant retrofit status” mean? What issues do you need to be concerned about when purchasing a home with a basement apartment? Read on, and you shall find out!
What exactly defines a basement apartment?
A basement apartment is a self-contained apartment consisting of a room or rooms in a singe or semi-detached house and can be located in any part of the house, not necessarily in the basement. They have also been called granny flats, nanny suites, accessory apartments and second suites. In the City’s bylaw, they are referred to as a “residential unit”.
A self-contained apartment shall have a separate means of entry (which may be through another unit) a kitchen (or cooking area) and bathroom facilities. A self-contained apartment may be as small as a single room that contains all of the features listed.
However, if you rent a room in a house or a flat with a shared entrance, kitchen and bathroom facilities, this bylaw does not apply to you.
Are basement apartments legal in Brampton?
If you purchase a home in Brampton and the basement apartment was built after November 16, 1995, it is illegal. The only legal basement apartments in Brampton had to have been built prior to that date, and have had to been registered with the city before January 31, 2006 and/or have legal non-conforming status.
A single or semidetached registered home can only have one basement apartment. Homes that have been subdivided into more than two units are strictly prohibited unless the property has been specifically zoned to permit multiple units. It is extremely rare to find a house that has been zoned as a triplex!
What should I be watching out for when I am looking to buy a home with a basement apartment?
Lawyers or real estate agents such as myself can confirm the status of a basement apartment with the city in order to provide you with the right information.
Real Estate Agents are bound by code of conduct guidelines and must fully and fairly disclose all information about a property for sale. Homes with doubtful legal status are typically listed with the caution “Vendor does not warrant retrofit status”, and you may have to seek further legal advice before proceeding with the purchase of a home.
What are the risks of an illegal basement apartment?
- Increased Liability – The onus is on a homeowner to meet established standards for a second suite. If anything should happen, such as a fire, the homeowner would be held liable due to failure to meet requirements.
- Loss of Insurance Coverage – Having a rental unit in your home is a material change to your home. Non-disclosure of this change of use may in fact make your coverage null and void.
- Limited recover of damage – An insurance policy is not responsible for rebuilding costs related to meeting current established standards. Your insurance company is only required to cover the costs of fixing your home back to the state that existed at the time your policy was made prior to any damage.
- Prosecution – If you do not meet City codes it means that you are breaking the law. You run the risk of being charged and can face fines with a maximum penalty of $50,000 and/or a year of imprisonment on each count.
- Financing – Income from an unauthorized basement apartment is generally not considered when qualifying for a mortgage loan.
- Tenants – You are a landlord. You are obliged to maintain your basement apartment in good operating order and you must follow all fire safety laws. Tenants may apply for rent reduction where the unit fails to meet the prescribed municipal health, safety, maintenance and property standards.
- Tenant Insurance – Your homeowner’s policy will not cover property owned by a tenant.
Can I legally convert vacant space in my home into a basement apartment?
NO! The City’s zoning by-law does not permit new basement apartments. If the basement apartment did not exist in your home prior to November 16, 1995, a home in Brampton cannot be legally converted. Furthermore, any home built after 1995 can never have an existing legal basement apartment.
In order to permit a new basement apartment, the Zoning By-law would have to be changed. Changing the Zoning By-law requires the submission of a Zoning Amendment application and fee ($7759.00) to the City’s Planning, Design and Development Department.
For more information on basement apartments in Brampton, you can visit the City Of Brampton’s website.
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Hello Lang, I recently purchased a house from a real estate agent. The basement has an apartment (complete with bathroom, full kitchen, etc.). At the time of purchase I thought it was a legal apartment due to the fact a real estate agent was the previous owner but based on some of your previous answers I can tell it is not legally registered. My mortgage broker is aware that I have this apartment but told me most apartments in Brampton are not legal so not to worry. I have also taken out extra insurance for the basement, had an electrician come in to fix any fire safety issues and made about $5,000 in renovations as I want happy tenants. I realize that regardless I am still at risk and can get charged but will have to take the risk as I am self employed and need the extra income (which is the reason I told my real estate agent to only look for houses with a basement apartment). I feel a bit duped as no one involved disclosed that it was not registered and I trusted all of them as they are all professionals in real estate. Since I will be renting it illegally, should I still declare the income with the CRA?
Hey Lang, Thanks for your valued information. I recently had a notice at my door for inspection by city stating that they suspect that we have dual dwelling in our house. We usually have friends visiting over and I am pretty sure our neighbours made a complaint about us thinking that we have people living in our basement as I always ask my friends to use the side door to enter. We are a family of five people and we have finished basement with washroom, kitchen, bedroom and living. When the inspector comes, would we get fined as we have a kitchen downstairs or he would just ask us to remove the stove. Do they fine us rightaway or they give us a chance to make the required changes. Thanks once again