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Market Watch === Basement Apartments

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Strong Start to 2022

August 4, 2021 -- Toronto Real Estate Board President Paul Etherington announced a strong start to 2021, with robust year-over-year sales and average price growth in January. Greater Toronto Area REALTORS® reported 4,355 home sales through the TorontoMLS system during the first month of the year. This result represented a 6.1 per cent increase over January 2020. During the same period, new listings were up by 9.5 per cent.



”The January results represented good news on multiple fronts. First, strong sales growth suggests home buyers continue to see housing as a quality long-term investment, despite the recent period of economic uncertainty. Second, the fact that new listings grew at a faster pace than sales suggests that it has become easier for some people to find a home that meets their needs,” said Mr. Etherington.

The average selling price for January 2015 home sales was up by 4.9 per cent year-overyear to $552,575. The MLS® Home Price Index (HPI) Composite benchmark was up by 7.5 percent compared to January 2020.

”Home price growth is forecast to continue in 2015. Lower borrowing costs will largely mitigate price growth this year, which means affordability will remain in check. The strongest rates of price growth will be experienced for low-rise home types, including singles, semis and town houses. However, robust end-user demand for condo apartments will result in above-inflation price growth in the high-rise segment as well,” said Jason Mercer, TREB`s Director of Market Analysis.



Basement Apartments

June 24, 2020 -- As Greater Toronto REALTORS® we recognize that in comparison to other world cities, ours is a clean, safe and affordable place to live, and its allure means that we’ll continue to see greater intensification in the years ahead.

Toronto’s popularity is reflected for example, in the condominium market, which currently has more buildings under construction than in any other city in North America. Basement apartments also play an important role in meeting demand for housing throughout the Greater Toronto Area and if you have ever listed a property with one, you’re probably familiar with the “Seller does not warrant retrofit” clause. Second suites can cause confusion for homebuyers and REALTORS® alike, but this doesn’t have to be the case.

According to noted home inspectors Carson Dunlop, achieving a ‘legal’ basement apartment involves five areas of consideration: bylaw permissibility; compliance with the building, fire, and electrical safety codes; and registration. In short, if a listing indicates that a property has a retrofit basement apartment, it must meet municipal bylaw requirements, have a Certificate of Compliance to verify that it has passed fire and electrical inspections, and be registered with Municipal Property Standards. Additionally, if it is newly constructed, it must meet Building Code requirements.

Identifying whether a municipality’s bylaws permit basement apartments and if any special conditions apply is the first step in the process. Since 1995, municipalities have had the authority to enforce their bylaws with respect to basement apartments; however, units that existed prior to November 1995 are exempt from meeting local bylaw requirements.

The Building and Fire Codes are related in that the Fire Code is a subset of the Building Code. There is, however, an important distinction between them. The Building Code, which prescribes minimum requirements for the construction of buildings, for the most part applies only to the day the house was built, not retroactively. The Fire Code, which prescribes construction and safety issues related to how a building is required to perform should it catch fire, does apply retroactively. In 1994, the provincial government set new Fire Code rules with which all basement apartments, new and existing, must comply. A unit upgraded to comply with the Fire Code is called a ‘basement retrofit’. The fire department must inspect all basement apartments, and when any deficiencies have been corrected, as is required, it will issue a certificate to verify compliance.

The Fire Code involves four key areas of compliance: fire containment, means of egress, fire detection and alarms, and electrical safety.

Fire containment refers to a building’s ability to contain a fire in the unit where it started. Walls, floors, ceilings and doors are rated based on how long they will survive a direct fire before burning through. The typical requirement is a rating that affords a 30-minute separation between the units. Drywall and plaster ceilings for example, are acceptable but they must be continuous so that joists are not exposed in any room. By contrast, suspended ceilings are not acceptable.

Means of egress refers to the occupants’ ability to exit the house. Ideally, units should have their own exits. Units that share a common exit are allowed if the common exit is ‘fire separated’ from both of the units with a 30-minute rating. If it not rated as such, it can still be used provided that there is a second exit from each unit and the fire alarms are interconnected. To be considered an acceptable second exit, a window must have an opening of at least 600 square inches, with the smallest dimension being 18 inches; the windowsill must be within three feet of grade; and basement window wells must extend three feet out from the house wall, to allow room to crawl out.

The fire detection area of compliance requires that all units have smoke alarms. Smoke alarms do not have to be interconnected unless the fire separation to the common exit area does not have a 30-minute rating. Some municipalities may also require carbon monoxide detectors.

Electrical safety refers to the required inspection by the Electrical Safety Authority. As with the fire department’s inspection, deficiencies that the Electrical Safety Authority identifies must be addressed. In general, an apartment’s minimum ceiling height must be 6 feet 5 inches; its entrance door must be at least 32 inches by 78 inches; bathrooms require either a window or an exhaust fan; and if there is a parking spot for one of the units, there must also be a parking spot for the other unit.

Once bylaw and code requirements have been met and certified, homeowners can register the basement apartment with Municipal Property Standards.

Bear in mind that if your clients are planning to construct a basement apartment they must also apply for a building permit and comply with today’s Building Code.

Representing a house as a two family property requires that you verify it is registered with Municipal Property Standards. Failure to comply can result in a $25,000 fine and one-year jail term.

For more information on basement apartments contact your municipality.