Square One finds that 15% of secondary rental suites in Canada are illegal

VANCOUVER, Aug, 2, 2017 /CNW/ - Square One Insurance Services recently surveyed over 5,500 house owners in British Columbia, Alberta, and Ontario. The survey revealed that 11% of all house owners rent out a portion of their home to non-family members. Alberta had the highest percentage at 14%, followed by British Columbia at 13% and Ontario at 9%.

"We wanted to conduct this survey for two reasons," says Daniel Mirkovic, Square One's President. "We're noticing an increase in inquiries by house owners that are renting a portion of their home to non-family members. We wanted to understand what was driving this increase. We also wanted to understand how house owners are coping with municipal laws relating to rental suites in single-family homes."

According to the survey, the top three reasons why house owners have rental suites are:

1. For the extra income (40%);
2. To help with the mortgage (34%); and,
3. For companionship (14%).

While mortgage-helpers are well, helpful, there are many municipal regulations that house owners need to be aware of. For example, Vancouver and Toronto have capped the number of rental suites allowed per single-family house to just one. Other regulations, which vary by municipality, usually include: zoning restrictions; building code compliance; unit size restrictions; minimum parking requirements; and, inspection and licensing compliance.

Square One's survey found that 17% of rental suites in detached houses are considered illegal. Ontario has the highest percentage at 21%, followed by British Columbia at 15%, and Alberta at 14%. The actual percentage is likely to be considerably higher as residents may be reluctant to disclose illegal rental suites.

"Most municipal regulations for secondary suites ensure residents have adequate and safe housing options," states Mirkovic. "But some, like the one rental suite per single-family house, are just outdated. It's hard to understand why cities advocating for more affordable housing options would continue to enforce this outdated regulation."

According to the Canadian Mortgage and Housing Corporation, Ontario has more than 233,000 secondary rental units, British Columbia more than 155,000, and Alberta more than 125,000. Secondary rental units tend to be more affordable than apartment suites. For example, the average cost in Metro Vancouver of a 2-bedroom secondary suite is $1,390/month, while a 2-bedroom apartment suite is $1,450/month.

In addition to municipal regulations, house owners need to be aware of the home insurance implications of having rental suites in their homes.

• If you added a rental suite in your home, then you've likely increased the property value. Most policies require that you advise your provider of any improvements over a certain amount. If you fail to do this, then you may be underinsured in the event of a loss.
  
• Most policies also require that you advise of any changes in how your home is used. Failing to disclose rental suites could render your home insurance void. It's important to note that many providers will insure your home even if you have more than one suite.
  
• More people living in your home may mean an increased liability risk. If your tenant, or a guest of your tenant, trips on a ladder in your backyard, or slips on an icy step, then you can be sued for their injuries. You may want to increase your liability coverage.
  
• Your policy will not cover your tenant's property or liability to others. So, make sure your tenants carry their own insurance. This will cover their personal property, and it may cover your property, if they unintentionally damage your home.
  
• Your policy will not cover your own property in the unit, such as window coverings, appliances, or furniture in a furnished suite. You may need to add "landlord's property" insurance to cover anything that you own.
  
• If you rely on rental income to help pay your mortgage, then you should purchase insurance to protect against lost income during an insured event. For example, this insurance will replace the income that you lose while the property is being repaired from a fire.

If you're a house owner with a secondary rental suite, then it's important to stay informed and to have the right insurance coverage in place. To learn more, speak with your insurance provider or call Square One at 1.855.331.6933.

Established in 2011 and based in Vancouver, British Columbia, Square One offers the only home insurance policy in Canada that can be personalized to your unique needs. That means you only pay for the protection you need. Square One is also one of the few providers to automatically include earthquake, sewer backup and broad water protection in its policies. Square One currently serves British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Arizona. For more information about Square One, or to get an online quote, visit www.squareoneinsurance.com.

SOURCE Square One Insurance Services Inc.

Aneel Mattu, Square One Insurance Services, Tel: [phone] ext. 127, Cel: 1.778.919.2096, [email protected]

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www.squareoneinsurance.ca