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Can you use income from illegal or non conforming suites to help with financing, and can you get property managment to look after these types of suites.
illegal or non conforming suites
- Thread starter newfiebullet
- Start date
QUOTE (newfiebullet @ Jan 7 2010, 10:00 PM) Can you use income from illegal or non conforming suites to help with financing, and can you get property managment to look after these types of suites.
If you are buying, say, a legal non-conforming property, that`s not problem. All it means is that it was legal at some point, then some regulations changed, so by today`s standards it would not be zoned the way it was zoned before the changes in regulations.
However, if you are buying, say, a single family home used as a triplex, then you will encounter challenges. Your mortgage broker will have to work hard to find a lender willing to finance it, and of course they might take only a portion of the property`s income into account. The reason being that if somebody complains, City Hall may step in and force you to change the use of the property to what it is zoned for. In that case you will lose some of the income.
If you are buying, say, a legal non-conforming property, that`s not problem. All it means is that it was legal at some point, then some regulations changed, so by today`s standards it would not be zoned the way it was zoned before the changes in regulations.
However, if you are buying, say, a single family home used as a triplex, then you will encounter challenges. Your mortgage broker will have to work hard to find a lender willing to finance it, and of course they might take only a portion of the property`s income into account. The reason being that if somebody complains, City Hall may step in and force you to change the use of the property to what it is zoned for. In that case you will lose some of the income.
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let me correct what legal non-conforming means. its means its Legal as on now but does not conform to other homes around it. eg.
a house that is used as a duplex but is located on a street where all other homes are single family. that`s what a legal non- conforming means.
a house that is used as a duplex but is located on a street where all other homes are single family. that`s what a legal non- conforming means.
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For a little more clarity on the definition of legal non-conforming , take a look at the following quote from the City of Oshawa website. I believe this definition is roughly the same for all of Ontario.
What is a legal non-conforming use?
A legal non-conforming use is a use that is not recognized in the Zoning By-law but which lawfully existed on the day the Zoning By-law was passed (June 6, 1994). In Ontario, these uses have a right to continue and cannot be "zoned" out of existence.
A legal non-conforming use should cease to exist in the long run and should be replaced by a use that conforms to the Zoning By-law and the Official Plan. Despite this objective, the Ontario Planning Act recognizes that legal non-conforming uses should be given some concessions even though they do not comply with the municipality`s long-term planning documents. Consequently, the Planning Act gives the Committee of Adjustment some additional powers regarding the enlargement and expansion and change of use of legal non-conforming uses.
Take a look at the last sentence in the quote. Could be some hidden gems here. Check with your municipality on their attitude or how receptive they are to the notion of expanding or creatively changing an existing legal non-conforming use. This type of zoning will scare away a lot of investors; dig deep for your own possibilities.
Hope this helps,
Barry
What is a legal non-conforming use?
A legal non-conforming use is a use that is not recognized in the Zoning By-law but which lawfully existed on the day the Zoning By-law was passed (June 6, 1994). In Ontario, these uses have a right to continue and cannot be "zoned" out of existence.
A legal non-conforming use should cease to exist in the long run and should be replaced by a use that conforms to the Zoning By-law and the Official Plan. Despite this objective, the Ontario Planning Act recognizes that legal non-conforming uses should be given some concessions even though they do not comply with the municipality`s long-term planning documents. Consequently, the Planning Act gives the Committee of Adjustment some additional powers regarding the enlargement and expansion and change of use of legal non-conforming uses.
Take a look at the last sentence in the quote. Could be some hidden gems here. Check with your municipality on their attitude or how receptive they are to the notion of expanding or creatively changing an existing legal non-conforming use. This type of zoning will scare away a lot of investors; dig deep for your own possibilities.
Hope this helps,
Barry
Speaking of ethical, I`m always a fan of Sun Life.
Have you seen their recent commercials? They`re great.
http://www.youtube.com/watch?v=GYWGEbIhSMg
Have you seen their recent commercials? They`re great.
http://www.youtube.com/watch?v=GYWGEbIhSMg
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QUOTE (newfiebullet @ Jan 7 2010, 10:00 PM) Can you use income from illegal or non conforming suites to help with financing, ..
no
QUOTE (newfiebullet @ Jan 7 2010, 10:00 PM) .. and can you get property managment to look after these types of suites.
yes
no
QUOTE (newfiebullet @ Jan 7 2010, 10:00 PM) .. and can you get property managment to look after these types of suites.
yes
QUOTE (ThomasBeyer @ Feb 3 2010, 11:29 AM) no
yes
Thomas a mortgage broker who I met said that we could use an illegal suit to help get financing....... Was she lying to me? I didn`t go with her and don`t need the rent to make the payments (or help with the financing) on that property but would just like to know so I don`t use that broker in the future.
yes
Thomas a mortgage broker who I met said that we could use an illegal suit to help get financing....... Was she lying to me? I didn`t go with her and don`t need the rent to make the payments (or help with the financing) on that property but would just like to know so I don`t use that broker in the future.
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QUOTE (aiden1983 @ Feb 3 2010, 02:52 PM) Thomas a mortgage broker who I met said that we could use an illegal suit to help get financing....... Was she lying to me? I didn`t go with her and don`t need the rent to make the payments (or help with the financing) on that property but would just like to know so I don`t use that broker in the future.
If you have a lease in place many banks will accept that - legal suite or not.
If you have a lease in place many banks will accept that - legal suite or not.
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QUOTE (RedlineBrett @ Feb 3 2010, 03:33 PM) If you have a lease in place many banks will accept that - legal suite or not.
I have heard of a different definition for non-conforming here in Alberta, or maybe this is a different suite type with a similar name (except for the word legal).
A non-conforming suite is/was a legal suite but the building code and safety standards have changed and the suite is in this respect non-conforming. The suite is not required to be upgraded except when significant renovation is done. So paint jobs are ok but if you start to replace an old kitchen or add a laundry area then the entire suite will have to be redone to meet current standards.
Illegal suites are suites that are in an incorrect land-use zone that does not allow such suites or they don`t meet the current building code and safety standards. For example, Calgary basement suites were illigal if there was not a separate entrance. I think that is not being changed.
Either way, illegal suites can be shut down as soon as somebody files a complaint - such as a resentful ex-tenant or a jealous neighbour. Hence, I have a hard time believing that their income can be used to qualify for a mortgage.
I have heard of a different definition for non-conforming here in Alberta, or maybe this is a different suite type with a similar name (except for the word legal).
A non-conforming suite is/was a legal suite but the building code and safety standards have changed and the suite is in this respect non-conforming. The suite is not required to be upgraded except when significant renovation is done. So paint jobs are ok but if you start to replace an old kitchen or add a laundry area then the entire suite will have to be redone to meet current standards.
Illegal suites are suites that are in an incorrect land-use zone that does not allow such suites or they don`t meet the current building code and safety standards. For example, Calgary basement suites were illigal if there was not a separate entrance. I think that is not being changed.
Either way, illegal suites can be shut down as soon as somebody files a complaint - such as a resentful ex-tenant or a jealous neighbour. Hence, I have a hard time believing that their income can be used to qualify for a mortgage.
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It all depends on the lender. Some will use the income ,illegal or not, but most will require the suite income to be authorized. And each lender will use different percentages of the income.
Don`t forget that cmhc and genworth both have different rule for handling suite income.
Don`t forget that cmhc and genworth both have different rule for handling suite income.