Over 230,000 basement apartments are in Ontario but most of them are not up to current building code. Many owners are not aware of the risk involved when renting their basements. I recall an incident where a tenant had slipped and fallen and then sued the landlord. The insurance company voided the landlord’s insurance policy because the apartment was not up to code and the landlord had not informed the insurance company that the basement was being rented. The landlord paid out of pocket for over half a million dollars as settlement.

Basement apartments provide benefits for both the homeowner and the tenant. The extra income will assist to pay down the current mortgage or act as a supplementary income for the owner.  An average two-bedroom basement apartment will fetch about $1350 per month, which will cover mortgage payments for about $300,000. Tenants can find affordable accommodation as well. These secondary suites also provide companionship and assistance for owner. An elderly couple, for example, may choose a tenant who can assist in lawn care and snow removal for a reduce rent.

A rental suite will add value to the property, however if that is not disclosed to the insurance company then the owner could be under insured. With a rental suite, more people will be living in the property and the risk will be greater. Owners should increase their risk portion on the policy. The insurance company works under the assumption that the rental suite is built to code and if is not up to code, then they can void your insurance policy and you are left unprotected.

 In the event of a complaint, the city’s inspector and the fire department will inspect the property to determine if the apartment will be allowed. If it can, then, they will request that the owner retrofit it to continue the current use or to convert it back to a single-family home. If the owner refuses, they can be fined up to $25,000 per offence.

To retrofit the suite, the owner will have to complete an application for registration along with a nonrefundable finding fee, a survey and a site plan of the home showing existing structures, driveways and boundaries of the property. The owner must provide a current and a proposed floor plan stamped by an engineer or architect licensed in Ontario. 

All basement apartments must meet the Ontario building code standards to be approved. The code requires that there must be only one apartment in the basement. Some of the essentials are as follows:  the rental suite must be smaller than the main dwelling and it must have two exits. Fire separation between the units and interconnected smoke alarms and carbon monoxide detectors must be installed within each unit and all shared areas. The furnace room requires special fire rated drywall or a fire sprinkler system. The bathroom and the kitchen fans must be vented separately to the outside. The entrance door to the suite must be 1.75-inch solid wood or metal and have a self- closing mechanism.

Before any construction work is to begin, a building permit is needed from the local municipality and all the work to be done by certified trade persons. The city inspector will inspect the job at different stages of construction. After construction, the city’s fire, gas and electrical company will conduct a final inspection before you can rent.

A retrofitted apartment will add value to the property.  The tenant will live in a safe place and the owner will be protected in the event of an accident.