renting out a unauthorized suite

[hi-revs]

I bought a home knowing that the basement suite is considered unauthorized.
it has full kitchen and bathroom, just not "legal" as the city doesnt know about it.

Im planning on renting it out the way it currently is. Dumb question, but is this just stupid to do?

If I were to rent it out the way it is, should I still get the tenant to sign a contract and any addendum, or should i just skip this part and hope for the best? Im thinking of presenting the contract just to save my a$$ a bit incase things get messy. But i know i could get fined by the city if anything does happen and the city finds out.

I just dont want the hassle of getting a inspection and needing to put in reno money if needed.

I know plenty of people doing this the "illegal" way and have never had issues. I know it comes down to the tenant. (Ie. My dad has had tenents in his basement for the last 20yrs, and even tho there were verbal disputes, its never escalated to the point where the city needed to be involved. All his tenants had their mail delivered to the house as well)

just want to hear more opinions from people with more of this experience. Is this a risk worth making? Im going to assume that 50%, if not more, of houses around your neighborhood have a unauthorized suite currently being rented and income not reported to CRA.

[GLOW]

My only comment is I think you should have a standard RTA agreement with a tenant and any addenda with your terms that are within your rights

[Lomac]

Illegal suites are still fully covered by the RTA for both the property owner and the one renting. Where you run the risk of getting in trouble is if the CRA or local municipality finds out about the suite (tax evasion with the CRA and potential neighbourhood zoning laws being your two major risks).

I'm not sure about this bit but if the suite doesn't have properly sized windows to act as an escape route in case of a fire or other catastrophe, I'm pretty sure you can be legally held responsible for any injuries or deaths. Again, not positive on this but I recall reading a few things a while back indicating it to be so.



Just keep in mind that even though you may know a bunch of people getting away with it, that wont necessarily be the case with yourself. One annoyed neighbour or ex-renter placing a call to the local townhall or CRA is all it takes.

[godwin]

Are you in Vancouver or the suburbs? Different jurisdictions treat things differently. For the most part, I won't worry too much about it. Good neighbour relations and decent tenant helps. Yes you still need a RTA even if it is an illegal suite.

CRA on the other hand is potentially more painful, but the CRA doesn't talk to the city zoning etc.

So I would see those 2 to be separate risks.

[hi-revs]

Its in coquitlam

[godwin]

One good thing about Coq is it is relatively spread out vs Surrey.. so it is hard to notice, also most area are permitted for secondary suits.. so it depends on the age of your dwelling (pre or post 2000). I assume you have checked out their brochure? revert to a non suite is so easy too eg removing a lock.

Originally Posted by hi-revs

Its in coquitlam

[hi-revs]

Built in2010

[hi-revs]

I've decided to go with renting it out. Having tenant sign RTA and additional addendum.

[Lomac]

Additional addendum?

[hi-revs]

Originally Posted by Lomac

Additional addendum?

As in other "house rules" I'd like to put in.

[GLOW]

additional terms he'd like to add. i think the RTA called them amendments or addenda i can't remember. i was trying to make myself sound S-M-R-T

[tiger_handheld]

house rule #1

- tenant waives all rights to notifying city of suite status

[godwin]

Just that will render the addendum invalid. You can't forbid someone to report something that is illegal.

When writing these rules, never overstretch.

Best way is to be selective of your tenants and treat them reasonably, so they have the sense of ownership to your place too. For my tenants, I always include weekly cleaning service, you get to hire someone (expense to write off) and they can keep an eye out on the property. I find out especially for foreign students it is nearly a necessity.

Originally Posted by tiger_handheld

house rule #1

- tenant waives all rights to notifying city of suite status

[Fafine]

the tenants wont know its unauthorized right?

[hi-revs]

Originally Posted by Fafine

the tenants wont know its unauthorized right?

Obviously not.

[tiger_handheld]

Originally Posted by godwin

Just that will render the addendum invalid. You can't forbid someone to report something that is illegal.

When writing these rules, never overstretch.

Best way is to be selective of your tenants and treat them reasonably, so they have the sense of ownership to your place too. For my tenants, I always include weekly cleaning service, you get to hire someone (expense to write off) and they can keep an eye out on the property. I find out especially for foreign students it is nearly a necessity.

I see that sarcasm does not go well over the internet. My apologies.

[XplicitLuder]

how does one go about knowing its not illegal? lol as somoene who wants to rent out a suite eventually when i move out...i dont wanna rent one thats illegal lol

[SoNaRWaVe]

if there is no laneway, you're allowed 2 legal suites. so 2 kitchens. illegal would mean 3 "suites" with 3 kitchens (or more....). so unless they let you inspect how many kitchens they have (highly unlikely) its rather hard.

unless you kinda stalk them and see how many people come and go, then you might figure out if they have 3 suites.

even if you rent an illegal suite, the RTA still covers you.

if there is a laneway, then the laneway is one suite where the main house is 2 suites. or illegally, the house once again, will have more than 2.

[Great68]

Originally Posted by XplicitLuder

how does one go about knowing its not illegal? lol as somoene who wants to rent out a suite eventually when i move out...i dont wanna rent one thats illegal lol

A dead giveaway is that a legal suite will have it's own civic address (IE: Main suite would be 1-5652 and rental would be 2-5652 etc...) A second giveaway is that a legal suite would have it's own dedicated BC Hydro meter.

Illegal suites sound worse than they are. Municipalities will only really enforce those bylaws if they're A)Stuck up prissy rich areas (IE Oak Bay in Victoria) or B) Get a lot of complaints from neighbors.
I doubt a call from one disgruntled tenant reporting an illegal suite would get a bylaw officer to show up at your doorstep.
The thing is, if municipalities started cracking down on illegal suites everywhere the rental market would bit up shit creek, rent prices would skyrocket because supply would go to shit. They don't really want to do that.

I lived in an "illegal" rental suite for 6 years, and I had no problems. It was professionally run. In fact, the hoops that my former landlords would have had to jump through to make it legal in Victoria would have ruined the place
(One rule is that each suite must have it's own parking spot on the property, which would have destroyed the nice front yard)
I had the main floor:

Except for the crazy rabbit lady that eventually moved in upstairs, I liked that place.

[JLC]

I would bet 75% or more of the basement suites in Vancouver are unauthorized suites...

[murd0c]

that number jumps to 95% once you hit Surrey... It doesn't really matter the only difference is the tax for extra garbage and water etc. I rent the lower half of my dads house and someone reported it and he had to pay an extra $350 for the year to make it a legal suite. Still the same meter and address but I have my separate breaker compared to the rest of the house.