Secondary Suite (a.k.a. Legal Suites or Illegal Suites)

Dated: 05/28/2020

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In this blog, we will be talking about what makes a suite legal or not. There are many illegal (or unauthorized) suites in the Greater Vancouver due to the high rent and cost of owning a home. It is useful for buyers looking for houses with a secondary suite such as renting out the basement to provide additional income. This blog will help you conclude if renting out an illegal suite is worth the risk or not.

A legal suite has the proper zoning, adheres to BC building codes, meet the city's building permit requirements and has a business license if you want to rent it out as an income. An illegal suite does not have approval under BC building codes or city permits for numerous reasons. The main concern is the proper safety protocols of these suites. Many of them do not comply with all the rules yet are rented out. 

Risks associated with illegal suites:

    • If an illegal rental suite is reported by someone, the result may need the owner to bring his/her suite up to code and possibly lead to fines.
  • Insurance coverage of the suite or home is affected when safety permit standards, such as fire and electrical standards, are not met. During an insurance loss claim, homeowners who did not declare their illegal suite may find themselves violating the terms of their insurance agreement.

Many home owners question whether building and maintaining a legal secondary suites is worth the hassle or not.

Benefits of having legal suites:

  • Act as a mortgage helper
  • May increase value of the house
  • Covered by home insurance
  • Generally provides a higher rental income compared to unauthorized suites

To conclude, renting out an additional suite(s) can provide nice additional income but it is important to remember the risks involved if the suite being rented out is not authorized.

Remember that is is only a general rule-of-thumb, different circumstances will call for different action.

Please reach out to us and we can see what works best for you!

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CANADA HOME FOR SALE

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