If you answered “yes” to these two questions, you’re in luck! You have an excellent opportunity to earn a nice side income by becoming a landlord. Basement apartments are an increasingly popular rental option for tenants. And with some creative work and prudent planning, you can capitalize on the demand.
According to a Canada Mortgage and Housing Corporation (CMHC) study, over 15% of houses in Toronto have basement rental units. The study also notes that basement apartments are more prevalent than alternatives like laneway homes and second-floor suites. Their popularity is partly due to cities encouraging their development to address rental shortages and steep home prices.
Despite their lucrative income potential, renting out your basement isn’t something you can do on a whim. There are specific requirements you must meet before you’re allowed to convert it into a rental unit.
In this article, we’ll walk you through the rules for setting up a legal basement apartment in Canada.
What Are the Rules for Legally Renting Out Your Basement Apartment?
Making your basement rent-ready isn’t as simple as putting new drapes on the windows. In fact, you could unknowingly be breaking the law if you’re already renting out your basement.
According to a survey by Square One Insurance, about 17% of all secondary suites in Ontario, Alberta, and British Columbia are illegal.
Each jurisdiction has specific rules and regulations that determine whether a basement suite is legal. By failing to adhere to the minimum legal requirements, a basement apartment can present a substantial risk. And not just to its occupants but to the community at large.
Your basement apartment must comply with local:
- Zoning laws
- Building codes
- Fire codes
- Electrical safety standards
Each municipality has zoning criteria determining whether you can legally convert a basement into a rental unit. Depending on your home’s location, your city may not allow you to operate a basement apartment in the first place.
For example, the city of Nelson in British Columbia allows basement apartments only in areas classified as R1, R3, and R6 zones. In addition, your home’s lot size must be a minimum of 276 square metres if it’s in an R1 zone.
Building codes encompass a wide range of health and safety requirements established by your municipality:
- Floor area and ceiling heights
- Entrance doors
- Bedroom windows
You’ll need to closely follow your local building code regulations to ensure any renovations you do are legal and safe.
This category covers fire safety, including smoke alarms, fire separation between units, and exits to escape a fire. For your basement suite to be deemed safe, your municipality may require a Fire Prevention Officer to conduct an inspection and issue a safety certificate.
Electrical Safety Regulations
Your existing electrical service must be able to handle the extra load generated by your new basement apartment.
A licensed electrician can determine if your current configuration is adequate or not. You may need to add an extra electrical panel (and possibly an electrical meter) if it’s insufficient. However, before performing any electrical work on your property, you’ll need to obtain an electrical permit from your province.
There are also other factors you need to consider, some of which are easy to overlook.
For example, is there enough space on your driveway for your tenant to park their car? If not, you’ll need to find out if parking in the street overnight is legal in your neighbourhood.
In addition, you also need to account for the excess garbage your home will produce and potential problems with water draining into the basement.
Getting The Right Permits
To convert your basement into a rental unit, you’ll need to get, at minimum, a building permit from your municipality. To obtain one, you need to submit an application form that typically includes the following details:
- Site plan with your home’s address and drawings showing the building, parking spaces, and basement suite entrance location
- Floor plan of the basement suite that indicates all dimensions, ceiling heights, plumbing fixtures, etc.
- Fire separations between units
- Photographs of the exterior of your home
- Elevation drawings (if you’ll be altering the outside of your home)
- Engineer-stamped drawings (if you’ll be making changes to the structure of your home)
Depending on the size and scope of your project, you may need to obtain additional permits for heating, plumbing, fire, gas, and electrical work.
The 13 Basic Requirements for a Legal Basement Apartment
Now that we’ve covered the basics, it’s time to go in-depth. Below, you’ll find the 13 basic requirements you’ll need to follow to rent out a basement apartment.
Remember, the requirements may differ based on where you live, so verify your municipality’s regulations before you list your property on rental sites. You may need to do some serious renovations!
- The property must be at least five years old.
- You cannot alter the front of the house in a way where it no longer resembles a one-unit building.
- The basement must be smaller than the rest of the dwelling.
- The minimum ceiling height must be 6’5” and continuous. Suspended (T-bar) ceilings and exposed joists aren’t permitted. Also, the furnace room ceiling must be dry-walled or plastered.
- The doors in the basement suite must be made of solid wood or metal, with a minimum thickness of 1.75”. Interior doors must have a half-inch gap at the bottom to allow for sufficient air movement within the unit. Exterior doors must be at least 32” x 78.” The windows must be a minimum of 18” in size and their opening at least 600 sq in. In addition, all windows must be within 3’ of the ground, and if there’s a window well, it must extend at least 3’ to allow a person to crawl out.
- The bathrooms must have either windows or fans.
- The basement suite must have a refrigerator and a functioning stove. The cupboards must have a capacity of at least four cubic feet multiplied by the number of persons occupying the unit.
- You must obtain a building permit before you begin construction. Plus, you may need to provide a parking space on your property for tenants. Typically, if the main dwelling has a parking space, it’s mandatory for the basement suite to have its own parking space, too.
- You must install and maintain smoke alarms. Depending on the bylaws, a smoke alarm may be necessary on every floor, including those with a bedroom. The alarms must be audible when bedroom doors are shut. Carbon monoxide detectors are required in buildings equipped with a fuel-fired appliance or an attached garage.
- An electrician must conduct an electrical inspection of the basement apartment. Any deficiencies must be fixed before a tenant moves into the unit. Once the review is complete, you must retain the letter of compliance issued by the electrician. You must present this letter to the chief fire official in your municipality upon request.
- A continuous fire separation with a minimum Fire Resistance Rating of 30 is required between each dwelling unit and other areas of the property. A lower Fire Resistance Rating may be acceptable if your property has interconnected smoke alarms or sprinkler protection.
- The basement apartment must provide a means of escape in the event of a fire. Two means of escape are necessary if one leads to the main dwelling unit.
- Adequate soundproofing is needed between dwelling units. The minimum sound transmission class rating is STC 50.
Final Need Some Help Renting Out Your Basement Apartment? Singlekey Can Help
Converting your basement into another living space sounds like a lot of work, right?
Obtaining the essential permits, performing renovations, and adding sleek furnishings can take considerable time and effort. But the benefits a basement apartment offers can pay off handsomely.
In February 2022, for example, the average rent for a one-bedroom basement apartment in Canada was $1,400.
An extra source of income like this can bolster your monthly budget. You can pay off credit card debt, enlarge your savings account, or book an extra vacation at your favourite resort.
If you’re looking to list your brand new basement apartment soon and start earning some passive income, be sure to contact us. We have the expertise and resources to help get your rental unit up and running and find a high-quality tenant.