The law with respect to apartments in houses changed as of May 22, 1996, with the passing of the "Land Use Planning and Protection Act" (Bill 20). This law establishes new rules for apartments in houses. Municipalities can once again use zoning by-laws to decide where new second units in houses are permitted, and apply standards to those second units. The Land Use Planning and Protection Act and the law which relates to pre-existing apartments in houses, known as The Resident's Rights Act, do NOT apply to houses with more than two units.
The new law continues to allow houses with two units, if those two units were in existence on November 16, 1995 and covered by the Resident's Rights Act. In addition, units for which the home owner or builder had been issued a building permit on or before May 22, 1996 (the day Bill 20 became law) are permitted.
Agents should also be aware that the deadline for compliance with the Ontario Fire Code requirements relate to matters such as adequate fire exits, fire separations and inspections by Ontario Hydro (electrical safety) and smoke alarms.
According to the Ministry of Municipal Affairs and Housing, "Home owners with an apartment in their house has until July 14, 1996 to have their electrical system inspected by Ontario Hydro, and to comply with other fire code requirements such as exits and separations. A violation of the Fire Code can result in one year in jail or fines up to $25,000.
New apartments must comply with certain property and Municipal Zoning (Planning) standards, as well as with the Ontario Building Code. ALL apartments must comply with the Ontario Fire Code.
A REALTOR® is well advised to address the issue of whether the home complies with the standards, regardless of whether that REALTOR is acting for the Vendor or the Purchaser. According to the Ministry, a qualified architect, engineer or home inspector can advise you on whether or not the unit meets fire safety requirements. In addition, most Municipalities have a Fire Department that can conduct a fire inspection of the property.
Whether you act for the Vendor or Purchaser in a situation where an apartment in the house is plainly evident, the issue of the legality of the apartment in the house should be addressed. There are various ways to accomplish this. If you are acting for the Vendor, our Firm recommends that as the listing stage you ascertain whether the unit complies with all applicable legislation by having the homeowner obtain clearance certificates where applicable. A prudent Purchaser would require those certificates anyway, and it is probably just as well that you get the issue out into the open from the onset.
If you are acting for the Purchaser, you should protect your Purchaser with a representation by the Vendor that the property complies with all Fire Code, Hydro and Municipal requirements and insert a clause allowing inspections to be conducted by the Purchaser together with a proviso that should the said inspection reveal any deficiencies, that the Vendor shall remedy those deficiencies at his/her expense prior to closing.
The Client, whether they are the Vendor or Purchaser will look to you as the REALTOR®, for protection and advice with respect to matters that are or ought to be within your knowledge.
By educating yourself with respect to these changes in law, you will be better positioned to advise your client should a problem present itself. Being aware of potential problems at the listing or offer stage and dealing with that problem at the time, goes a long way towards ensuring a smoother closing and consequently, a more satisfied client.
Further information is available as follows:
Ministry of Municipal Affairs and Housing at (416) 585-7041,
Land Use Planning and Protection Act (Bill 20) at (416) 585-6515.
Building Codes and how to obtain a permit:
please contact your local Municipal Building department.
Fire Codes: please contact your local Fire department listed in your telephone book.
Electrical inspection: please contact Ontario Hydro Electrical Inspections Processing Centre.