If you are a investor or buying a property to live in and rent the basement apartment for rent, before signing the agreement make sure that basement apartment is a legal one and it is written in the agreement.
Is this a legal in-law suit?
The Real Estate Council of Ontario (RECO), is cracking down on agents who do not make clear whether the basement apartment is legal. Many agents often use wording such as, “Agent and sellers do not warrant legal retrofit status of in-law suite”, or you may see wording such as “income potential with “separate entrance/ in-law suite”. This kind wording may not appear on MLS listing or on Internet listings or anywhere else. This kind to tactic is unprofessional and it is against RECO Code of Ethics. It is up to the agent to take steps to verify the legal status of the basement suite so that the appropriate language should be used in the MLS listing which is available to consumers.
Under Ontario law, basement suites that existed prior to November 1995 are exempt from meeting local zoning bylaw requirements, but not other safety standards. It seems that RECO now requires agents to confirm whether a basement suite is legal, this is a complex task. The problem is that municipalities will not tell the owners or agents whether basement suites are legal.
There should be a system in place for owners and agents to verify legality of these suites, and there for taking out the guess work.