Creating an Apartment from Your Basement

Rental homes have been increasingly popular in recent years, with many homeowners opting to purchase and manage them as a long-term investment. Some people choose to buy a separate rental property to manage, while others consider dividing their homes to make room for a second unit or a basement apartment. If you're considering of turning your basement into an apartment, you'll need to give it a lot of thought and preparation to make it a safe and legal area for future tenants.

Secondary unit vs room rental

A secondary unit, or secondary suite, is a living accommodation separate from the main living area of a residential building—usually a single-family home or row-house—existing either above or partially below ground level (some are even built in attics).

While the second unit can share utility connections with the main residence, it must contain a bedroom with a dedicated bathroom and kitchen area to be considered a legal apartment. Extras like in-unit laundry, living, and dining rooms may be included at your discretion, though it is often advised to provide a separate HVAC system to avoid incursion of cooking or other odours between the living spaces.

Why convert your basement into an apartment?

Some homeowners choose to bring family members and in-laws closer and they’re also one way to avoid downsizing once the littles have flown the coop, keeping adult children closer while offering privacy and independence. A basement apartment can also be a great source or supplementary income for those looking to invest, but according to our expert REALTOR®, Rita, it’s important to know the market you’re in. “There’s a lot of opportunity in real estate investments, but as you know, timing is everything,” she says. “Canada’s housing markets shattered records in 2020 with 551,000 residential sales over all MLS® Systems–a new annual record, despite a global pandemic. With record sales activity, low supply, and high demand, 2021 is sure to be another interesting year in Canadian real estate. That said, it’s important to note every market is different. An informed decision is the best decision.”

First things first

While renting out an apartment in your house can present long-term financial benefits, building a legal basement apartment requires a substantial financial investment, plus the ongoing time and resources needed to maintain the unit in a state of good repair for your tenant(s). Hosting a tenant on your property also means sharing more space, like common entryways, parking and yard space. Additional noise from a tenant is also something to consider and can be addressed using sound dampening building materials. It’s also important to keep in mind that your tenant will also share the same neighbours with you, so good communication with your existing neighbours can make a big difference.

If you’re confident moving forward, a good place to start is your municipality’s planning and building office to confirm if your property is zoned to allow a second unit—the size, age, type of your home, and its proximity to surrounding buildings can all influence how you can proceed.

Tenancy matters

Because basement apartments are considered official residences, tenancy laws come into force according to the province or territory in which you live.Some municipalities, like Calgary (starting January 1, 2022), require secondary suites—whether rented or not—to be registered with the municipality.

Fire safety

While all residences must comply with the National Building Code of Canada, specific fire, and safety codes apply to secondary units, differing from one province, territory, and municipality, to another. Here are some key items to be aware of:

Fire separation: One of the primary safety measures for secondary units is adequate fire separation, which refers to the construction of barriers that slow the spread of fire to allow adjacent residents to escape in the event of fire.

Smoke and Carbon Monoxide detection: Both smoke and carbon monoxide (CO) detectors are required in any accommodation, so be sure to check the rules for each as well as their ideal installations to ensure speedy detection in the event of fire or unsafe CO build-up.

Exits: Safe egress from the unit is a must. Depending on the type of entrance to the second unit, or if the entrance is shared with the main residence, you may need to create a second exit. This could be a secondary door, or an egress window to provide a safe fire escape.

Engineering, zoning, and inspections

Due to the precise safety and legal requirements for second units, it’s best to hire licensed professionals for your design and execution—unless you’re professionally qualified to do so, this should never be approached as a DIY.If your property is zoned to allow a secondary suite, then you’ll need to work with a certified engineer or building architect to develop a sitemap and detailed plans to apply for a building permit. Many design build companies specialize in legal basement apartments, so be sure to look into multiple companies, check reviews, and always ask for references. Inspections before, during, and after project execution are key to ensure a safe, error-free build for both your and your future tenant’s peace of mind.

There are numerous procedures and details to track along the road to ensure a safe and effective build of your future basement apartment, just as there are with major renovations. Take your time, rely on experienced specialists to guide you through the process, and don't be afraid to ask questions so that you're completely involved, aware, and comfortable at all times.