Illegal basement aptapartments

[FONT=Calibri] I guess when home inspectors are licensed our governing body would hold us responsible for not verifying the basement apartment was legal and conforming to regs!!![/FONT]
Agents on the hook for illegal in-law suites

Discipline hearings signal need for fuller knowledge about two-unit homesShare via Email


Real estate agents now seem to be required to confirm the legality of in-house apartments after recent RECO discipline decisions.
By: Bob Aaron Property law, Published on Fri Oct 03 2014

The Real Estate Council of Ontario (RECO), the body that licenses and governs real estate agents, is cracking down on representatives who advertise two-unit homes without making clear whether the second unit — usually a basement apartment — is legal.
Many agents typically use wording such as, “Agents and seller do not warrant legal retrofit status of in-law suite.” Descriptions like this could disappear in the wake of two recent decisions of RECO discipline panels.
Dan Plowman has been a successful real estate agent in Whitby, Ont. for 25 years. Last year, he listed a property, describing it as having “income potential” with “separate entrance/in-law suite.” The MLS listing for the property included the disclaimer that “we do not nor does the seller warrant the legal retrofit status of the ‘in-law suite’.”
That wording, however, did not appear on Internet listings, or on
Wording like this is common in the real estate industry and is generally understood to mean that the basement suite is not legal. In my experience, Plowman’s listing used wording that thousands of Ontario agents have used and continue to use.
In a RECO discipline hearing, Plowman faced charges of acting unprofessionally by including information in an MLS listing which was either false, inaccurate, misrepresentative or misleading to consumers.
It was alleged that he failed to take steps to verify the legal status of the basement suite so that the appropriate language could be used in the MLS listing and available to consumers.
In an agreed statement filed at his hearing in June, Plowman admitted that he breached several sections of the RECO Code of Ethics and was fined $5,000.
The same thing happened this past May to Tammy Loeman, an experienced Hamilton real estate agent. She advertised a property with the remarks: “Fabulous home used as 2 family . . . own your own rental property or live in one unit and let the other one pay your mortgage.” She also marketed the home on web sites with the words “fabulous family home with income rental.”
Loeman acted for both buyer and seller in finalizing a purchase agreement. Unfortunately, the local zoning only permitted single-family dwellings. The buyer was an investor who intended to rent out both units for rental income.
His complaint was that if he knew the second unit was illegal, he would not have bought the property, or would not have agreed to the price in the contract.
At her discipline hearing, Loeman admitted that she acted unprofessionally by failing to determine and disclose material facts relating to the property. RECO fined her $10,000.
Under Ontario law, basement units that existed prior to November 1995 are exempt from meeting local zoning bylaw requirements (but not other safety standards). The discipline panel accepted that the basement apartment contravened the zoning bylaw, but in fact it may have been a pre-1995 unit and perfectly legal from a zoning viewpoint. As a result, the discipline decision could well be wrong in law.
It is not clear whether Plowman and Loeman were represented by legal counsel. What both Plowman and Loeman did is common practice in the real estate industry.
It appears that RECO now requires agents to confirm whether a basement apartment is legal — a complex taskthat involves determining whether the unit complies with zoning bylaws, fire code, building code, electrical safety requirements, and — in some municipalities — registration and licensing.
The problem is that municipalities will not tell owners or agents whether basement units are legal. How, then, can RECO require agents to verify legality of those units?
*Bob Aaron is a Toronto real estate lawyer. He can be reached at , on his website, and on Twitter, @bobaaron2. *

Due to the privacy act most information on a property like well and septic location and tests results on water or leachfields and including permit information on permitted uses specific to a specific property are unavailable to the general public without the owners written permission to the local AJH allowing release of said information. This can take weeks so I don’t see them allowing holding up the sales process to get it. That is what lawyers are paid for to use due diligence for the client prior to closing a deal.

I completely agree with this, and licensing HI’s will/should not affect this what-so-ever!

If they’re gonna list it, they better verify it!!

Tomorrow’s client asked me why my confirmation which includes listing facts had the place down as only a 2 bedroom when the Agent and seller said it was a 4.

Yep 2 bedroom s in the basement.No egress .

Zoning info not available to general public?

Plumbing and septics fall under part 8 of the OBC (Ontario), not zoning. Zoning is available to the public.

General zoning is available to the public but just try and get information on a specific property and its no go. A homeowner with a property who has an amendment to the zoning bylaw to have a basement apartment legalized can rest easy in the knowledge that other property owners on the street,other that the people directly on each side who got the original notice regarding the amendment , can never find out if he has a legal apartment or not. All the office will say is that they will look into it and follow up with the owner.
Any application for an amendment to the bylaw, a zoning application specific to the home or an easement or severance must, and can only, be released with the owners written permission Other facts, held in the files of the public offices of the municipality, on the property such as septic information and site specific information like well locations and information like well depth and flow are also considered private now just like any applications or conformation of permits and inspections on buildings.

Good article Roy! I had one Friday 3 +1 but sorry nothing for egress, window was only 10" high, so now I’m the bad guy…dream crusher :shock:

lol :|__)=d>