Office Policy Updates
To be reviewed along with TREB’S Secondary Units Phamplet !
Download a Pamphlet & ensure one is left at your listing and given to the Selling Agent before presenting offers.
Protect yourself & the Seller with a disclaimer
Disclaimer: “Retrofit Documentation Available” Only if it really is!
In rare cases your Seller may have already received retrofit approval. In this case, the home may become a more attractive and saleable listing and should be advertised on the MLS listing as having such a feature. However, before you make your next move, ensure you receive copies of the following documents up front:
1) A CERTIFICATE FROM THE FIRE DEPARTMENT granting approval.
2) A CERTIFICATE FROM HYDRO granting approval for both units.
3) Municipal Building Department approval (this requirement varies, please refer to the Toronto Real Estate Board Retrofit Booklet
You must protect yourself and the Seller, by receiving these two certificates upfront and attach copies to all offers! As a Realtor, licensed under the act, the public will rely on your competence. Not doing so will most definitely lead to law suits, fines and potential imprisonment.
An example of not following procedure could result in the following:
The purchaser buys a house and rents out the basement apartment. His tenant subsequently complains to the municipality that he thinks the apartment does not meet fire standards. The owner, “the new purchaser” may face:
1. Cost to Retrofit 2. Fines & Imprisonment 3. A possible court case
And if the retrofit policy was not discussed and documented the realtor will be involved in penalties named above. Protect yourself and get everything in writing, it’s funny how a year down the road nobody remembers what was said to them.
Disclaimer: “No Retrofit Guarantee” where there is a potential unit
If the Seller is currently utilizing the basement or upper level as a rental - and does not have the proper approvals from the Fire Department and Hydro extreme care must be taken. Even, if there is the potential of adding on a second unit, an example being a second kitchen or something as subtle as an extra 3 piece bath the purchaser must be advised about Retrofit. One of the reasons is, should the purchaser convert the basement into a secondary unit after the closing, and does not realize the necessary approvals, you too could be liable for not having explained Retrofit.
Always put the disclaimer “No Retrofit Guarantee or Not Retrofitted” on all your listings when there is the slightest doubt about present or future use or a secondary unit.
How to handle the Showings
Protect yourself & the Purchaser
Hand out: “Retrofit Pamphlet & Acknowledgement”
If there is even the slight chance that your Purchaser may consider using part of the house as a secondary unit - you must provide them with the following two items:
1) THE SUTTON GROUP RETROFIT PAMPHLET
2) A SUTTON GROUP BUYERS RETROFIT ACKNOWLEDGEMENT FORM.
You should also add the appropriate clause to your offer:
It is your responsibility to explain the potential costs involved and the basic process. Let a Home Inspector help you out in these cases. Most Home Inspectors, for a fee, can help estimate the potential costs to retrofit. Remember, it is not automatic that an individual will get approval to add a secondary unit to the home. Each Municipality has it’s own cost list for issuing Letters of Compliances and the waiting time varies as well.
Selecting the Appropriate Clause
To be used in conjunction with appropriate forms
Offer clauses provided by the Toronto Real Estate Board
UPDATED CLAUSES - 2006!! CLAUSES - COPY & PASTE TO EASY OFFER!
SELECT ONE OF THE FOLLOWING OFFER CLAUSES:
Clause Number #1 !
n The Buyer hereby acknowledges that the lower level rental is not a legal apartment and may not have received approvals from the Fire Marshall's Office or Ontario Hydro as required in the Fire Marshall's Act amended nor City or required Municipal Approvals. The Buyer confirms being advised that these approvals are mandatory by law should the dwelling be utilized as a rental or anything other than a single family dwelling in any manner whatsoever. Buyer agrees to assume all responsibility for effecting all repairs and cost to comply with Government Laws or removal compliance.
Clause #2 in the rare case that the property is retrofitted.
n The Vendor warrants that the basement apartment has received approvals from all necessary authorities and attaches letter of compliance hereto.
Make sure all parties to the agreement acknowledge what state the property is in, as it pertains to retrofitting criteria, and REDUCE YOUR RISK!
Don't forget to leave the pamphlet on the kitchen table for all to see!