From: The Toronto Star, Saturday May 30, 1998
by Alan Silverstein
In 1994, the NDP attempted to legalize basement apartments and other accessory residential uses. Four years later, thousands of units still don't meet the necessary standards to be legal.
In determining what is a legal basement apartment in Ontario today, confusion reigns supreme.
For years basement apartments proliferated, despite being illegal in most areas. Fire officials were concerned about residents' safety, since many units were viewed as firetraps.
Rather than clamp down on their existence, the NDP opted to legalize them. A series of tragic fires in early 1994 strengthened the government's resolve to legalize basement apartments and impose fire safety standards. The new law on apartments in houses took effect on July 14, 1994.
Many people thought all existing basement apartments were suddenly legalized. Not so. Though poorly publicized owners had two years (until July 14, 1996) to comply with the retrofit provisions of the Fire Code, discussed below.
While apartments in homes were now allowed, they also had to satisfy the Fire Code to be fully legal. Unless both conditions - permitted use and compliance with the fire code - were met, a basement apartment would be illegal come July 14, 1996.
June 1995. New government, new philosophy. On Nov. 16, 1995, the Tory government voiced its displeasure with the NDP law by introducing legislation to repeal it (on May 22, 1996, it became law).
One problem. Basement apartments had become a permitted use in July, 1994. Banning them would strip homeowners of that status. So the Tories had to grandfather (or preserve) those two-unit houses made a permitted use by the NDP, and which were used or occupied that way on the magic date of Nov. 16, 1995.
The Ministry of Municipal Affairs and Housing's Apartments in Houses Guide Update interprets the expression used or occupied very broadly, to mean houses where the physical structure consisted of two residential units on the magic date.
The presence of the second unit on Nov. 16, 1995 means that the house will always be permitted to have two units - even if one or both units were vacant on the magic date, or in the future.
Establishing that a basement apartment was a permitted use as of the magic date is only half the battle. Even a grandfather home containing two existing dwelling units had to comply with the Fire Code on July 14, 1996! In other words, even though basement apartments may be permitted in terms of zoning, they also must fully comply with the Fire Code to be 100 per cent legal today.
What are those four fire safety standards? Fire separation between dwelling units; means of escape; fire alarms and detection; and safe electrical wiring. The penalty for non-compliance with these very technical standards is steep: a fine of up to $25,000, up to a year in jail, or both. Homeowners could also face a civil action (with possible denial of insurance coverage) if a tenant dies or is seriously injured in a fire in a basement apartment that violated the Fire Code.
Two separate inspections and clearance certificates are needed to 'legalize' basement apartments, from the local fire department and Ontario Hydro. Preliminary inspections must often be conducted, to indicate the work needed to upgrade the property, followed by final inspections. The more extensive the deficiencies, the more likely a building permit will be needed.
To avoid inheriting the seller's problems, buyers of homes with basement apartments must learn whether and how it is a permitted use, and if it has been properly inspected and approved, before signing any contract.
A clause should then appear in the offer, forcing the vendor to deliver both clearance certificates on closing, plus evidence of permitted use status. Agents should also warn clients about the hazards of buying homes with uncertified basement apartments. Simply whitewashing the issue, with no vendor representation in the offer about compliance with the Fire Code retrofit provisions, is a cop-out.