Adding an extra dwelling unit to your home in Toronto has its fair share of benefits, from increasing property value to filling a housing gap. However, building a secondary suite remains an intensive process that needs careful research, planning, and strict construction requirements. It might be tempting to cut corners to save time, but going through legitimate channels and permits from the start will help avoid bottlenecks and delays later.
In this guide, we’ll explain why it’s crucial to have a valid building permit and the penalties you may face if you forgot the legal steps.
Why should you have a building permit for secondary suites?
While a building permit might require more upfront work, having one for your secondary suite comes with an important set of perks.
Ensure quality renovation
A valid building permit signals to contractors that there’ll be inspections at various stages of the construction. Knowing that their work will be examined incentivizes them to be more thorough with their renovations, ensuring quality results.
Increase property value
A building permit allows your property to be legally recognized and cataloged on the Multiple Listing Service (MLS), which is a criterion that investors look for. The MLS system is a database established by real estate brokers providing trusted information about properties for sale.
Different regions may have their own MLS where real estate professionals and buyers can search for properties based on features or locations. From legal addresses, photos, and descriptions to whether the home has a fireplace, the database discloses every detail about a listed property. Having your property featured here helps get it noticed by buyers, so it can have the best chance of selling fast and at the highest price.
Housing supply gap
The housing supply gap is due to the lack of dwellings being built for the demand, which has led to rising house prices and rising rents.
An apartment that has been legally renovated and went through proper City inspections will increase in value will assure potential renters that it’s a safe housing option. Therefore, as a landlord, you have more leeway when setting higher rent.
Get better standing with banks and lenders
Banks and lenders can include a legal secondary suite as rental income. Though it depends on the bank and the branch, obtaining a building permit for your construction ensures that the full rental income on your property is counted.
Which penalties could you face without a permit?
While skipping the building permit may sound like a good idea, doing so could end up being more of a hassle in the end. You could face sizable consequences, and find yourself right back at square one if you get caught without one.
Fines and stop-work orders
According to Ontario’s construction laws, building without a permit may result in fines up to $50,000 in Toronto. Neighbors or tenants can also report you to the City, which can then shut down your rental unit. If that happens, you’ll need to get your construction legalized, which forces you to obtain that permit anyway. The only difference this time around is that it’ll be more challenging to get approved since you’ve already infringed on building codes.
Increased liability and limited insurance
A construction built without a permit represents a potential fire and insurance issue. For example, if you perform electrical work without a permit or inspection and a fire occurs, insurance will not cover the damages. You’ll be left with a hefty bill to foot for significant repairs.
When you’re flagged for building without a permit, you risk having to pay double when you try to get a valid one afterward. Costs for permits increase as a penalty for applying retroactively.
Construction delays and bottlenecks
Though it might be tempting to skip the hassle of the building permit process, you could face more setbacks in the future. Without a permit, the City can halt the construction of your secondary suite, sidetracking the timeline for your project.
While moving construction forward without a permit may seem like a time-saving option, risky penalties can set you back. We recommend going through the legal process from the beginning to ensure that your project goes smoothly while avoiding fines and delays.