Are you thinking about turning your basement into a rental unit? Many Ontario homeowners are creating basement apartments to make extra money or house family members. But there’s a big difference between any basement apartment and a legal one.
Let’s break down what you need to know about legal basement apartments in Ontario in simple, clear steps.
Why Make Your Basement Apartment Legal?
Making your basement apartment legal might seem like extra work, but it comes with big benefits:
- Higher property value when you sell your home
- More rental income because tenants will pay more for legal units
- Peace of mind knowing everything is safe and up to code
- Tax benefits (talk to your accountant about possible deductions)
- Avoiding fines from your city
The Step-by-Step Guide to Legal Basement Apartments in Ontario
Step 1: Check Your Local Rules First
Before you start any work, check with your city’s rules. Each city in Ontario has different rules about basement apartments. Call your city office or check their website to learn:
- If basement apartments are allowed in your area
- What building permits you need
- Special rules for your neighborhood
Step 2: Understand the Building Requirements
Legal basement apartments in Ontario must meet these basic requirements:
- Ceiling height: Usually at least 6.5 feet (1.95 meters)
- Windows: Big enough for someone to escape in an emergency
- Separate entrance: Your tenant needs their own way in and out
- Fire safety: Special walls and ceilings that slow down fire
- Smoke alarms: Working alarms in the right places
- Carbon monoxide detectors: Near sleeping areas
- Proper bathroom and kitchen: With good venting
Step 3: Get the Right Permits
Never skip getting permits! You’ll need:
- Building permits
- Electrical permits
- Plumbing permits
- HVAC permits (for heating and cooling)
Step 4: Hire Licensed Pros
Don’t try to do everything yourself. Hire:
- Licensed electricians
- Licensed plumbers
- Contractors who know basement apartment rules
Step 5: Prepare for Inspections
The city will check your work before saying your basement is legal. Be ready for:
- Building inspectors
- Electrical inspectors
- Fire department checks
Important Legal Tips Rob Shared
Our legal expert Rob Di Lisi from Stonegate Legal Services shared these key points:
Always Use a Written Lease
Even if your tenant is family or a friend, always use a written lease. Ontario has a standard lease form everyone must use.
Know the Residential Tenancies Act (RTA)
The RTA applies to your basement apartment even if it’s illegal. Key parts to know:
- You must keep everything in good repair (Section 20)
- You can’t cut off heat, water, or electricity
- You must give 24 hours notice before entering (except emergencies)
- You can’t change locks without giving your tenant a new key right away
What You Can Collect from Tenants
You can only ask for:
- First month’s rent
- Last month’s rent
- Key deposit (only the actual cost of the key)
Handling Shared Utilities
If your tenant shares utilities with you:
- Put the utility arrangement in writing
- Share copies of bills with your tenant
- Don’t shut off utilities if there’s a payment problem
Know the Rules About Discrimination
You cannot choose tenants based on:
- Race or color
- Religion
- Gender or sexual orientation
- Age
- Family status
- Disability
Remember: Tenants Have Rights to Guests
Your tenant can have:
- Roommates
- Overnight guests
- Pets
You can’t stop these even if you live upstairs.
What Happens If Your Basement Apartment Isn’t Legal?
If someone reports your illegal basement apartment:
- The city might fine you
- You might have to remove your tenant
- You’ll still need to follow proper eviction rules
- You might have to pay your tenant to leave (called “cash for keys”)
Get Started the Right Way
Making your basement apartment legal takes time and money. But doing it right from the start saves headaches later.
Before you start work or find a tenant:
- Check local rules
- Get proper permits
- Make all safety upgrades
- Have everything inspected
- Use the right lease
Want More Help?
If you’re thinking about creating a legal basement apartment in Ontario, get expert help. Our team at CRESI can connect you with professionals who know the rules in your city.
Check out our Ontario Landlord Series podcast for more tips, including our upcoming episodes about insurance and mortgage options for basement apartments.
This article provides general information only and is not legal advice. Always consult with legal professionals for your specific situation.
Last updated: April 2025
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