Hello, I am looking at 2 properties in St. Albert that have illegal suites and wondered what advantage there is to legalizing them. Has any one done one or in the process of doing one this year as the rules are strick. Any advise would be greatly appreciated.
Legalizing a basement suite
- Thread starter tsokalski
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legalizing a unit both reduces risk of having issues with the city due to tenant complaining for example or due to a real problem related to the fact the unit is illegal AND legalizing a unit adds value to the property due to the reduction in the risk mentioned above. just be careful not to affect other units in the process. I`ve heard stories about people contacting the city for the same purpose and as a result unfortunately city initiated closure of other illegal units within the same property.
I have to say when i bought my first property i didn`t follow all the rein buying steps. I bought a property zoned for a single dwelling unit, naively thinking it would be a simple process to go through to change this. Let me be very clear, its not.
You`re dealing with a highly political process in which the ultimate decision comes from a committee that is completely beyond your control. The likely hood of success is highly dependent on the opinions of your neighbors, the community council, and the alderman of your area. Talk to these people to feel out the situation. Either way its extremely risky and the last thing they care about is whether the property cash flows or not.
FYI i live in Calgary, which is a very backwards city in some aspects, secondary suites being one of them. Their new zoning bylaw is a farce since it included a secondary suites land-use designation but lacks a single lot in the city where they`re permitted.
You`re dealing with a highly political process in which the ultimate decision comes from a committee that is completely beyond your control. The likely hood of success is highly dependent on the opinions of your neighbors, the community council, and the alderman of your area. Talk to these people to feel out the situation. Either way its extremely risky and the last thing they care about is whether the property cash flows or not.
FYI i live in Calgary, which is a very backwards city in some aspects, secondary suites being one of them. Their new zoning bylaw is a farce since it included a secondary suites land-use designation but lacks a single lot in the city where they`re permitted.
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QUOTE (tsokalski @ Mar 13 2009, 11:11 PM) Hello, I am looking at 2 properties in St. Albert that have illegal suites and wondered what advantage there is to legalizing them. Has any one done one or in the process of doing one this year as the rules are strick. Any advise would be greatly appreciated.
Your first step is to have your agent or lawyer check if they`re "flagged" by the City and under a requirement to be made legal. Don`s "What`s behind the curtain" approach and why is the Seller selling? Is he aware he/she received notification from the City.
The advantages are that expenses are a write off and eliminate future shut down/complaints from tenants and losing that cash flow. (Then you`d have no exit strategy and be stuck with that property having to re-sell as a single unit dwelling.) Advantage: legal unit that has value for resale BUT again...making it cashflow and is there a return on your investment?
Disadvantages are many: non-refundable deposits, committee of adjustments, rezoning, fulfilling setback requirements, parking, fire protection (drywall, doors, etc), costs, potential headaches, etc. Time & Money and still not having a guarantee that they will authorize it.
As a Realtor and investor myself, I would say that if you`re sincerely interested, make an offer conditional on the fact that you want to check with governmental bodies, lawyers on this process. This way the offer is conditional, you can secure the property and do your due diligence with no money lost. If you don`t like what you find out, do not waive your conditions and walk away. If your offer never gets accepted because you want to do those checks...that`s your answer too.
Your first step is to have your agent or lawyer check if they`re "flagged" by the City and under a requirement to be made legal. Don`s "What`s behind the curtain" approach and why is the Seller selling? Is he aware he/she received notification from the City.
The advantages are that expenses are a write off and eliminate future shut down/complaints from tenants and losing that cash flow. (Then you`d have no exit strategy and be stuck with that property having to re-sell as a single unit dwelling.) Advantage: legal unit that has value for resale BUT again...making it cashflow and is there a return on your investment?
Disadvantages are many: non-refundable deposits, committee of adjustments, rezoning, fulfilling setback requirements, parking, fire protection (drywall, doors, etc), costs, potential headaches, etc. Time & Money and still not having a guarantee that they will authorize it.
As a Realtor and investor myself, I would say that if you`re sincerely interested, make an offer conditional on the fact that you want to check with governmental bodies, lawyers on this process. This way the offer is conditional, you can secure the property and do your due diligence with no money lost. If you don`t like what you find out, do not waive your conditions and walk away. If your offer never gets accepted because you want to do those checks...that`s your answer too.
QUOTE (rymac @ Mar 14 2009, 01:32 PM) I have to say when i bought my first property i didn`t follow all the rein buying steps. I bought a property zoned for a single dwelling unit, naively thinking it would be a simple process to go through to change this. Let me be very clear, its not.
You`re dealing with a highly political process in which the ultimate decision comes from a committee that is completely beyond your control. The likely hood of success is highly dependent on the opinions of your neighbors, the community council, and the alderman of your area. Talk to these people to feel out the situation. Either way its extremely risky and the last thing they care about is whether the property cash flows or not.
FYI i live in Calgary, which is a very backwards city in some aspects, secondary suites being one of them. Their new zoning bylaw is a farce since it included a secondary suites land-use designation but lacks a single lot in the city where they`re permitted.
I thought in Calgary an R-1 can be amended for a basement suite (as per the city of calgary`s website) - is this what you are referring to as a "highly political process"?
You`re dealing with a highly political process in which the ultimate decision comes from a committee that is completely beyond your control. The likely hood of success is highly dependent on the opinions of your neighbors, the community council, and the alderman of your area. Talk to these people to feel out the situation. Either way its extremely risky and the last thing they care about is whether the property cash flows or not.
FYI i live in Calgary, which is a very backwards city in some aspects, secondary suites being one of them. Their new zoning bylaw is a farce since it included a secondary suites land-use designation but lacks a single lot in the city where they`re permitted.
I thought in Calgary an R-1 can be amended for a basement suite (as per the city of calgary`s website) - is this what you are referring to as a "highly political process"?
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Is it possible that once you start the process, that the city will then have knowledge off your illegal suite, deny your application and make you take it out?
Is there a risk in starting this process from that respect?
Has this happened to anyone?
Is there a risk in starting this process from that respect?
Has this happened to anyone?
Hi,
I am going through this in Ontario. I bought the house as it was advertized with a legal second suite. The seller provided me with a Electrical, Fire, and Zoning approval. Two years after an inspector knocked on my tenants door and asks to do an inspection, next week the fire chief shows up, and then a CRA officer. I recieve an order that the apartment was built without a building permit. I show the officer the permits and he says I have been after the previous owner for years to get a building permit, and he says if I rip out the kitchen he will let me off with a warning. I explain that I need the apartment to keep the property cashflow positive and since I have zoning approval I would like to apply for a building permit. He says it is a fairly simple process and after showing the documentation he says I should sue the previous owner and call my title insurance company. My lawyer can`t find the previous owners, did not check the zoning status, and purchased the wrong title insurance so noooooo coverage.
Simple process... lol.
Get a permit package, get professional drawings, $1300.00, get sent away from the building office 4 times for minor errors in drawings and pay for each alteration(every second clerk is a rude plick). Finally after four months application is accepted, now the inspections begin, 4 different inspectors, and I am already being told that I will have to rip out walls and tear out floors. Did I mention I still have a tenant in there. The process is still ongoing and I have no idea how/when/where it will end.
Fun Fun Fun.....make sure your suite is legal before purchase, I thought I did. All this and I already had zoning, fire, approval which I here is the hardest part.
Good Grief
I am going through this in Ontario. I bought the house as it was advertized with a legal second suite. The seller provided me with a Electrical, Fire, and Zoning approval. Two years after an inspector knocked on my tenants door and asks to do an inspection, next week the fire chief shows up, and then a CRA officer. I recieve an order that the apartment was built without a building permit. I show the officer the permits and he says I have been after the previous owner for years to get a building permit, and he says if I rip out the kitchen he will let me off with a warning. I explain that I need the apartment to keep the property cashflow positive and since I have zoning approval I would like to apply for a building permit. He says it is a fairly simple process and after showing the documentation he says I should sue the previous owner and call my title insurance company. My lawyer can`t find the previous owners, did not check the zoning status, and purchased the wrong title insurance so noooooo coverage.
Simple process... lol.
Get a permit package, get professional drawings, $1300.00, get sent away from the building office 4 times for minor errors in drawings and pay for each alteration(every second clerk is a rude plick). Finally after four months application is accepted, now the inspections begin, 4 different inspectors, and I am already being told that I will have to rip out walls and tear out floors. Did I mention I still have a tenant in there. The process is still ongoing and I have no idea how/when/where it will end.
Fun Fun Fun.....make sure your suite is legal before purchase, I thought I did. All this and I already had zoning, fire, approval which I here is the hardest part.
Good Grief
QUOTE (Hammock @ Mar 23 2009, 07:58 AM) I thought in Calgary an R-1 can be amended for a basement suite (as per the city of calgary`s website) - is this what you are referring to as a "highly political process"?
Yes, it can be amended but you`re changing the zoning to either R-C1s or R-C2. It the exact same process as the zoning change since R-c1 and R-c1s are two very different animals. I`ll let you know how it goes when I`m finished with it.
Regards,
Ryan
Yes, it can be amended but you`re changing the zoning to either R-C1s or R-C2. It the exact same process as the zoning change since R-c1 and R-c1s are two very different animals. I`ll let you know how it goes when I`m finished with it.
Regards,
Ryan
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Hi all,
I am in the process of applying for Secondary Suite status in Calgary on a single family dwelling, in an MC2 lot, which is the new fancy way of saying R-2. It is going to be a real challenge.
I think that it will be worth it in the long run if we get approval. The list of drawings needed among many other things makes the process daunting. Then again, beginning this journey into Real Estate investing was equally, if not even more daunting.
It`s a process, right or wrong, and it has to be completed if you choose to go this route. I agree that Calgary has a particularly challenging system, almost ridiculous at some stages, and yet it has to be done.
I made the mistake of counting on the basement rent, not checking out if it was in fact legal. So, it`s already built and illegal. Unreal.
Good luck, and keep the posts active please. I need the help.
Chris
I am in the process of applying for Secondary Suite status in Calgary on a single family dwelling, in an MC2 lot, which is the new fancy way of saying R-2. It is going to be a real challenge.
I think that it will be worth it in the long run if we get approval. The list of drawings needed among many other things makes the process daunting. Then again, beginning this journey into Real Estate investing was equally, if not even more daunting.
It`s a process, right or wrong, and it has to be completed if you choose to go this route. I agree that Calgary has a particularly challenging system, almost ridiculous at some stages, and yet it has to be done.
I made the mistake of counting on the basement rent, not checking out if it was in fact legal. So, it`s already built and illegal. Unreal.
Good luck, and keep the posts active please. I need the help.
Chris
As a side question relating to this, what are you liable for as a landlord if you rent out an illegal basement suite and something were to happen to your tenant? Does it make a difference if you have done your dilligence to ensure that the property meets current safety codes?