Joe Richer is the registrar of the Real Estate Council of Ontario (RECO). This is the organization that enforces all of the rules that govern the real estate industry in Ontario. Before this, he was registrar at the Board of Funeral Services for 14 years.
Joe fields questions from the public in his weekly column in the Toronto Star called "Ask Joe. I read it as often as I can. His musings are sometimes but not always helpful and relevant. They're often incomplete, as in "yes, that's the way it supposed to work but that not the way it really works". His column today is an example of that.
Today's topic has to do with the perils of buying a house with a basement apartment, particularly an apartment that is not "legal". In order for an apartment to be legal, it must meet the local codes for zoning, electrical, building and fire.
For those who rent out an illegal basement apartment in their home, Joe writes, "if law enforcement finds out about it, you could be required to dismantle the apartment, and you could face fines, or even jail time". The Bold Font is mine.
Next year will be my 30th year selling houses in Toronto. I've sold a lot of houses with basement apartments and my guess is, of those, fewer than 10 of these apartments were legal. It's not that I'm intentionally avoiding legal apartments, it's just that there aren't that many available in the older neighbourhoods where I sell.
I'm happy to report that none of my clients have been fined, nor have any of my clients gone to jail as a result of their illegal basement apartment. To the best of my knowledge, they've all secured adequate insurance coverage and they use the income to help offset their sizeable mortgage.
I'm going to go out on a limb here but my guess is, if the local authorities were to go on a legalization binge and compel all landlords to retrofit their illegal apartments, there would be many thousands of tenants on the street and who knows how many mortgages would soon be in default.
In my humble opinion.