More and more first time home buyers, as well as certain types of investors, are showing interest in homes featuring basement suites.
With the promise of a single rental suite bringing in $800.00 to $1,400.00 per month (the average range for one to two-bedroom suites in Saskatoon and certain surrounding areas), it could make good economic sense for a first time home buyer to invest in such real estate property, especially if the aim is to self-finance a few home improvement projects or pay down a mortgage faster.
However before committing to a home that offers a “mortgage helper” basement suite, please be sure that you, as a first time home buyer, understand the differences between legal and illegal suites as defined by the city of Saskatoon occupancy and zoning standards, and the potential ramifications in owning an illegal suite property.
In recent years the demand for income suites, also referred to as secondary suites, produced many homes in the new Saskatoon neighbourhoods (Hampton Village, Stonebridge, Rosewood, Evergreen, and Kensington) with legal suites.
In order to be “legal” these homes had to comply with national building code standards. As well they had to have closed building permits, meaning the permitted real estate construction was completed and had passed all inspections. The features of a legal suite are many; regulated window and door openings, off-street parking, approved fire barriers, proper ventilation, separate entry and heating system, to name just a few. For full details please refer to the national building code for real estate.
As a future homeowner, it is important to understand that there are also homes in new areas where beautiful suites have been added by homeowners without permits. These suites are illegal. Plus, there are many older homes featuring basement suites throughout the city that are also illegal.
Saskatoon claims that illegal suites pose health and safety issues and that although it does not actively seek to find illegal suites it must act whenever alerted to the possibility. The city also claims that in most cases the discovery of an illegal suite is complaint driven. In other cases, discovery resulted from an occupant contacting the city for services, such as a secondary garbage bin, or a Social Services health and safety standards check.
Once an illegal suite is discovered, the building standards department will step in to inspect the real estate. Depending on how the home complies with zoning bylaws and other property specific factors, the homeowner may be given the option of legalizing it. However if the property cannot be legalized due to property specific factors or the homeowner is not interested in legalizing it, the homeowner will be ordered to remove the suite.
Some examples of a property that cannot be legalized for secondary suite use include a condominium townhouse or a semi-detached home, commonly referred to as a half a duplex. In both of these cases the illegal suite would definitely be given a removal order.
If a suite was added after 1999 without a permit, the suite would have to be modified by the homeowner to meet the current national building code standards, providing the real estate complied with zoning bylaws and there were no other issues with the property. But in many cases the cost to upgrade within the national building code standard has proven to be cost prohibitive, as many homeowners facing the added cost chose to remove the suite instead.
Now on a positive note; in many cases those with illegal suites added prior to 1999 may have an affordable solution through the Saskatoon LES (Legalizing an Existing Suite) program. The program was introduced after it became apparent that there was a shortage of rental real estate and that many existing illegal suites could not be upgraded within the national building code standard due to the extreme expense.
Under the LES program, legalizing a suite is typically less stringent and less costly. Saskatoon invites those interested in utilizing the program to fill out an application in order to begin the process. However, please keep in mind that when an illegal suite is removed by city order, and then added back illegally, it will never quality for the LES program. This is regardless of when it was added or whether it was added by a past owner or the current owner.
Purchasing a home with a suite as a first time home buyer, without having knowledge of its history and/or its legal status, could have devastating consequences. To protect against a terrible surprise be sure to utilize the services of a REALTOR®. Please consult with an experienced real estate agent. Discuss your goals, plans and dreams. The REALTOR® representing you will have the tools and the professional obligation to act in your best interest. As a result your REALTOR® will do the needed research and advise you accordingly.
Also be careful when relying on internet searches for your information. A young first time home buyer couple I am currently working with, did just that and the information they thought could be trusted was not pertinent to their area. Fortunately, I was able to clear up their misunderstanding before they got too far along in their process.
If you are a first time home buyer, an experienced buyer or a concerned homeowner with a basement suite and have questions or would like to have a confidential discussion, please feel free to contact me. It will be a pleasure to hear from you.