Illegal Basements: cash cow for owners, death traps for renters!

August 2, 2023August 2, 2023 Top Quality Canada apartment, basement, basement apartment, basement flat, Brampton, canada, danger, dangerous, expansive, illegal apartment, Misissauga, ontario, Peel Region, rental market, rental unit, toronto

In the Greater Toronto Area, looking through Facebook Marketplace, community rental groups or Realtor websites may be overwhelming, particularly if you’re trying to find an apartment that fits your budget.

The Greater Toronto Area has long been a vibrant hub of economic activity, cultural diversity, and urban growth. With its bustling metropolis, top-notch amenities, and thriving job market, the region attracts people from all walks of life, including renters seeking opportunities and a place to call home. However, beneath the glittering facade lies a harsh reality – a bad rental market that poses significant challenges for tenants. In this article, we explore the factors contributing to the difficulties faced by renters in the GTA and a rising issue with law breaking illegal basements that can easily turn deadly for occupants.

The most pressing concern for renters in the GTA is the skyrocketing rental prices. Over the past decade, the region has experienced an exponential surge in housing costs, particularly in Toronto itself. As demand outstrips supply, landlords have taken advantage of the situation, leading to exorbitant rents that put a significant strain on tenants’ budgets.

Despite the steady influx of older residents feeing the big city, the availability of rental units remains limited in the GTA doe to high immigration. A combination of factors, such as stringent zoning regulations, a slow pace of construction, shift towards condominium development and high immigration rates over rental has resulted in a scarcity of rental housing options opening the way for a quick money making for many cash wanting and negligent home owners.

Illegal basements have flooded the GTA!

It looks as though suspiciously-priced postings have totally penetrated the rental market in an effort to appeal to tenants who are constrained for cash, from horror movie basements to untidy storage rooms. One single home basement is often divided into 3 or 4 little apartments with no government regulations in place. Unlicensed trade people or DIY project made basements are everywhere!

One escape entrance/exit, small windows, no fire and smoke alarms installed are a daily routine of many wild basements rented out to unaware tenants. A disaster waiting to happen!

With a high population density and a extremely unaffordable housing market, finding a suitable rental unit in the GTA has become akin to a battle. Prospective tenants often find themselves competing with numerous applicants for the same property, leading to bidding wars and favoring applicants with higher incomes or stable employment. Unlike some other cities in Canada, the GTA does not have vacancy control, which means landlords can increase rents without any limitations when a new tenant moves in. This lack of rent control legislation has contributed to the continuous rise in rental prices, making it increasingly challenging for renters to find affordable housing.

And that is what many careless home owners know to exploit.

Retrofitting private basements into livable spaces is no joke, yet these illegal basement apartments pop up everywhere. Three teenagers who were caught in a basement apartment fire in northwest Calgary in 2009 for instance perished. A smoke detector that wasn’t functioning correctly and certain windows with security bars were observed by fire authorities.

This tragedy could have been avoided if the basement apartment was according the building code. Thousands of such apartments are in use in the GTA today, it is critical for tenants to understand how to spot risky, unpermitted basement suites. Even if some basements look very modern and clean, it doesn’t make them suitable for living.

How to spot illegal basement apartment

A good practice is, renters should always check if the suite has a City sticker on the door. All registered suites come with the seal of approval. The mechanical room in a legal basement unit will be smoke sealed. The ventilation and ducting will be encased in a fire barrier, and the walls and ceiling will be drywalled. Which you will never see in a basement apartment because it is very expansive and hard to do, as well many home owners are not aware of this must do thing.

A separate exterior entry, barrier-free windows that are big enough for an adult to fit through in case of fire, and several operational smoke and carbon monoxide detectors will also be found in legal suites. A restroom, a sleeping area, and kitchen amenities with proper exhaust are also required.

There are many other building, electrical or plumbing codes that need to be in place, yet these are often hidden behind dry wall and many times can not be seen by naked eye.

So, a good indication for an illegal basement is:

small windows

one staircase

no fire alarms

crooked and unprofessionally installed drywall

smeared popcorn sealing

unusually low ceilings

Never settle for cheap and unlicensed apartments as they can potentially come with disastrous consequences. Always look for dug-out well windows, separate entrance to the basement, installed and up to date smoke/fire and carbon monoxide combination alarms and always ask for a professional and licensed contractor building permit as a proof.

The rental vacancy rate in the GTA has consistently remained low, leaving renters with limited choices and fewer opportunities to secure affordable housing. This issue is particularly acute in Toronto and Peel Region, where the vacancy rate hovers at historically low levels. The COVID-19 pandemic exacerbated the challenges faced by renters in the GTA. As businesses shuttered, and unemployment rates surged, many tenants struggled to keep up with their rent payments, leading to increased financial stress and the risk of eviction. Sadly, many Canadians chose cheap and shady basement apartments as they did not have any better choice at the time.

Numbers and consequences

In a recent poll by Square One Insurance Services, 11% of home owners in Ontario, British Columbia, and Alberta rented out a portion of their property to a non-family tenant. The majority do it to earn extra money or contribute to the mortgage. However, there is a problem: 17% of these units are thought to be unlawful, and if this information is uncovered, owners risk facing financial penalties on two fronts.

Most localities forbade homeowners from renting out extra flats back in the 1990s. But when in-home rentals become popularity, rules started to emerge that many consciously or non-consciously ignore.

Owners who have rented out a unit in the past or who want to do so should be aware of the regulations, which vary from municipality to municipality and may cover things like:

The maximum number of rental units allowable in a single property
Restrictions on the size of a unit
Building codes
Zoning regulations
Licences required to operate a rental unit

If a homeowner is found running an unlicensed suite, they may be fined or told to stop operating the unit until they can make it compliant.

Another potential risk might never materialize. However, if it does and an unforeseen catastrophe results in loss, homeowners could find themselves unable to get insurance benefits for the rented property.

Most plans provide that homeowners must notify the insurer of any house modifications that raise the property’s worth as well as any changes in the property’s usage, such as the addition of a rental unit that generates revenue. A residence may be underinsured for loss or liability if an insurance is not kept up to date. The homeowner may be responsible for paying out-of-pocket for repairs to the excluded unit or for the expense of injuries in the event of a fire, flooded basement, or tenant slip and fall.

The risk to one’s life is a severe side effect of owning an illegal underground flat in Toronto. There is a purpose for the laws governing legal permissions. To protect people within and around the unit from potential hazards or mishaps, this is the justification. The inhabitants of the basement flat are at danger since an illegal unit could not always comply with the regulatory authorities’ fundamental standards. For instance, if your apartment does not adhere to electrical and fire safety rules and a flood or fire occurs, the resident is at danger of dying or suffering irreparable harm.

In Toronto, having an unlawful underground apartment puts you at constant danger of being sued for your possessions. The amount of documentation required, the penalties, and the harm done are not worth it. Also, don’t bother having your property insured because insurance companies won’t cover illegally obtained stuff.

Is Government doing enough to stop the spread of illegal apartments?

As living expenses in the GTA continue to rise, a new pilot initiative from the City of Brampton may assist to reduce the number of unauthorized rental units.
The pilot program, which would establish a limit on the number of people permitted in a residence and establish a system for sporadic inspections and penalties for unauthorized rental units, was approved by all Brampton councillors on March 29.

The initiative would also look into creating a Landlord Code of Conduct and compiling an interactive, searchable registry of Brampton-licensed landlords.
The pilot program’s final design is expected to be unveiled later this year, with a commencement date of early 2024 being projected. The initiative would initially only be available to rental homes in wards 1, 3, 4, and 5, which municipal authorities had picked because of their large concentrations of rental homes.

Even with such encouragements and projects, wild built basements are everywhere, literally!

Even with such difficult rental market, Livia Chow, newly elected mayor of Toronto is asking residents to open up their homes and offer available rental units to asylum seekers as more than 200 people remain temporarily sheltered at two North York churches.

How is this a good advice and who is going to build legal apartments for refugees?

A mind boggling spiral that does’t fix any issues on housing affordability, availability and on safety front. Wishful thinking of politicians that perhaps have lost sense of reality. While their homes could possibly house many refugees, many other Canadians still struggle to find anything, any shelter over their head, a basic human need that has become luxury in Canada.