Legal vs. Illegal Rental Suites in Edmonton

house with cash register

“Basement Suites and the Abominable Snowman.”

Why are basement suites like the Abominable Snowman? Because they don’t exist, at least not in the City of Edmonton, Alberta.

My client Jane was excited when she saw the advertisement, “beautiful, 3-bdrm bungalow with spacious 2-bdrm basement suite.” As part of due diligence, Jane went down to City Hall in Edmonton, and visited the Planning and Building department.

“Tell me about basement suites,” said Jane to the friendly development officer.

“Basement suites? What are those?” said the officer with tongue planted firmly in cheek.

“You know,” said Jane, “it’s a suite in the basement of a house,” not knowing how to describe the obvious in any better way.

“Oh, you mean secondary suites,” said the helpful development officer.

As it turns out, there is no such thing as a basement suite in the City of Edmonton bylaws. There is a Use Class called a ‘Secondary Suite’ defined as, “a self-contained dwelling located within a single detached house and has separate cooking, sleeping and bathing facilities.”

Jane’s biggest surprise was that, not too long ago, the zoning for single detached homes in mature areas severely restricted Secondary Suites. In recent years, the City of Edmonton has changed the bylaws to allow more infill housing and population density. Unfortunately, a lot of Secondary Suites from before the zoning change are illegal and may have been built without the proper permits.

The ever-helpful development officer then said, “If you want to read more, go to http:\\\zoningbylaw.

Jane knew her perfect prospective property was zoned RF1 (single-family). Now, not so enthusiastic, she headed out the door to rethink the purchase.

Jane thought a little more investigation would be in order, a little more ‘diligence’ as she had so often heard other investors describe the process of making a buying decision.

She went looking again in her local newspaper and in other real estate publications. Maybe there were other properties that would produce the revenue stream required for positive cash flow.

It didn’t take Jane too long to find other properties who advertised basement suites. There were also advertisements for homes with ‘in-law suites’ and ‘non-conforming’ suites.

Before spending any time analyzing these new possibilities, Jane knew what she had to do. In half an hour, she was back chatting with her friendly development officer at the Planning and Building department of the City of Edmonton.

Jane had a few more questions. “I’m looking at two more properties. One says it has an ‘in-law suite.’ The other says it has a ‘non-conforming’ suite. When we last chatted, I thought I knew what a basement suite was. Obviously I didn’t. So, I thought I would start with you before moving even one step farther.”

Jane was getting some good advice from the friendly development officer. At this point, I’d also like to add my own commentary from a legal perspective.

In-Law Suite (aka Nanny Suite):
There is no such thing as an ‘in-law suite’ in City bylaws. It refers to the generally accepted idea that if all residents of a dwelling are part of an extended family, no one will object. The existence and construction of a suite might not meet the bylaw but, as long as all residents are family, no one cares because it isn’t technically a Secondary Suite; it’s still part of a single-family dwelling.

Non-Conforming Suite:
Watch out for sellers using imprecise language! There is no such category as non-conforming. Calling a suite ‘non-conforming’ is a mis-description by a seller.

What the Edmonton zoning bylaw really says:

Suites can be:

  1.   Legal:
    The suite meets the requirement of the current bylaw, or;
    The suite was properly permitted under an older bylaw. This category is generally referred to as a ‘grandfathered suite’ although there is no such wording in the bylaw. Owners are not required to update the suite to meet the current bylaw.
  2. Illegal:
    The suite does not meet the requirement of the current bylaw, or;
    If built under an older bylaw, the suite was not properly permitted. To become legal secondary suites, these older suites must be upgraded to the current bylaw.

With this information, Jane asked the friendly development officer to check the zoning on three prospects. All three were zoned RF1, being single detached dwellings. “Is there anything else I can do?” moaned an increasingly frustrated Jane. The development officer sent her off to the Permits section. (For the purposes of this Tale we will presume there were no privacy issues.) Jane looked at the permits issued when the three dwellings were built. She discovered that:

Dwelling #1 with the ‘in-law suite’ had a permit for a single family home. Jane now understood that only an extended family could legally occupy this home.

Dwelling #2 had a thirty-year-old permit that clearly showed the dwelling was authorized to have a suite in the basement. Jane now understood that it was possible to have a legal suite that didn’t meet the current bylaw (grand-fathered).

Dwelling #3 only had a permit for a single family dwelling, but was advertising a non-conforming suite. That really meant non-complying because of the lack of a permit and therefore the basement development was illegal.

Jane went through this process with ten more properties advertised as having ‘non-conforming’ suites. Her conclusion was that non-conforming was often a smokescreen for illegal. In-law suite meant one family could live there. Feeling wiser but more sceptical, Jane headed home to re-analyze her prospects.

If you’re buying a piece of real estate with the intention of renting out its Secondary Suite, make sure you know what you’re getting into or risk not getting that rental income. Even worse, you could lose money. Some investors have reported a crackdown lately by the City of Edmonton. No more polite notices and phone calls advising of upcoming inspections or requests to de-commission a suite. The City has been taking immediate and drastic action! Illegal suites are getting slapped with a $1,000 fine and the tenants are supposed to move out within 21 days. Then the landlord has to apply for a permit and if s/he gets it, will probably have to do renovations before the suite can be rented out again.

In 2013, Edmonton realtor James Knull put together a handy guide to buying and renting Suited Houses, including sections on permits, zoning, and building/fire codes. It isn’t fully up-to-date anymore, but is still very useful. He refers to the City of Edmonton’s (previously) lax attitude, but as I’ve already mentioned, the City is taking a much more proactive approach toward illegal suites than they used to. I suggest taking Jane’s example and checking with the Planning and Development department before committing to anything that costs money. These days, your best bet is make sure a suite is either already legal or can be made legal.

This is a tale from Edmonton. Different cities and provinces have different zoning rules for suites, but the key thing is, they all have those rules.

Lessons Learned:

  1. Know the zoning rules in your town or city.
  2. Compare a potential real estate purchase against its actual zoning and permits.
  3. Don’t rely on seller’s descriptions. Figure out the legal status of the property, and use it to inform your buying decision.
  4. If there is an illegal suite in a piece of property that you want to buy, but it’s in a zone that allows Secondary Suites, find out what permits and/or renovations would be required to make it legal.
  5. If a property isn’t zoned for Secondary Suites, you can apply to have it rezoned. Unfortunately, that can be expensive, time-consuming, and isn’t guaranteed to work.


Buying and/or selling Alberta real estate? Contact Barry now!

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