Have you ever listed a property before that the Sellers have rented out their basement illegally, when not having a permit? If so, please keep reading…
First, a conversation needs to be had with the Sellers on why you cannot market the listing as a basement suite.
To call a suite “legal”, you must have a permit from the municipality. If the Sellers do not have a permit for the suite, then the suite is classified as “illegal” and cannot be mentioned in any of the remarks (Private or Public Remarks) on a listing.
What could happen if you advertise the property as income-producing with an Illegal suite in the basement?
- Bylaw can come and evict the tenants (if there are tenants)
- Bylaw can provide a fine
- Bylaw can request for the suite to be removed (wiring of the kitchen appliances)
- The RAE Member can be sued by the Seller and or Buyer for misrepresenting the property
- REIX will not cover you
- Will receive a Brokerload Offence from the Associations’ MLS® Help Desk
Should you have a mother-in-law suite, the suite must be currently used as a mother-in-law suite and not be advertised as income-producing. In Paragon when entering the listing, you can select Secondary Suite as Yes and Secondary Suite Permit as No, with no mention of suite in the remarks.
Other Terms to watch out for:
- Mortgage Helper
- Income Potential
- Non-conforming suite
- Tenant
- Rental Unit or Rental Amount
- Income Producing
- Tenant in Basement
Remember; If you are enticing someone to purchase a property under false pretenses, that is fraudulent, and your insurance through REIX will be voided.
Always inform your Buyer clients of an illegal suite and that it cannot be rented if moving forward with a property that has an illegal suite.
If you are the listing agent of a property that is using an illegal suite for income, then you must have the conversation that you cannot place any remarks of this kind on the listing.
To inform your fellow showing agents, you will need to let them know individually that there are illegal tenants in the basement. You cannot state there are tenants in the basement in any of the remarks in the Paragon.
For further information on this or any questions, please contact the MLS® Help Desk.