Legal Suite vs Illegal Suite | Do Banks Really Care?

Legal Suite vs Illegal Suite

Legal Suite vs Illegal Suite

In Canada it can be challenging to differentiate if a secondary suite or basement suite is a Legal suite vs Illegal Suite.

Essentially there is 3 types of suites and how they are registered: 

  • Legal Suite:  No explanation required really,  essentially this sweet ticks all the boxes.  It is full self-contained; meaning it has a separate entrance, full kitchen, bathroom and sleeping area.  It is also registered with the local municipality.
  • Illegal Suite:  One of the following make this sort of suite illegal.  It can be one thing, or a combination of the following: 
    • Incomplete kitchen
    • No proper sleeping area
    • Unhealthy living area (asbestos, mold etc.)
    • No separate entrance
  • Non-Conforming Suite:  This sort of suite checks all the boxes similar to the legal suite with the exception of one thing:  It is not approved or registered with the local municipality. 

Non-Conforming Suite’s are usually not a concern to banks and local credit unions.   In fact as of 2018:  Local Credit unions let you use 90% of the rental income on non-conforming suites towards qualifying!  Which may allow you to qualifying for MORE property. 

Reach out to us today and tell us about your unique property you have interest in.  We will tell you right away which bank or credit union could be a fit! 

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