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What are the implications of buying a non conforming property?


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#1 Fat Tug

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Posted 15 February 2017 - 10:39 PM

Was browsing some new listings today and saw one that describes the property as being "non conforming" (This particular listing, since people will probably be curious.) I assume the non conforming wording is due to the fact that it has a secondary suite, which is not allowed under its current zoning.

 

I'm curious to know what the larger implications of having a non conforming property might be. First off, does this wording imply that a variance has been granted for the non-conforming aspect, or simply that they acknowledge it does not meet current zoning requirements?

 

Does it impact how easy it is to get a mortgage, or how much a lender might provide?

 

Could the suite be rented out legally?

 

Will it be harder and/or more expensive to insure the property?

 

I suppose the answer to those may depend a lot on whether or not a variance was obtained but am generally interested to know what to look out for in these types of properties.


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#2 MarkoJ

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Posted 15 February 2017 - 10:54 PM

Was browsing some new listings today and saw one that describes the property as being "non conforming" (This particular listing, since people will probably be curious.) I assume the non conforming wording is due to the fact that it has a secondary suite, which is not allowed under its current zoning.

 

I'm curious to know what the larger implications of having a non conforming property might be. First off, does this wording imply that a variance has been granted for the non-conforming aspect, or simply that they acknowledge it does not meet current zoning requirements?

 

Does it impact how easy it is to get a mortgage, or how much a lender might provide?

 

Could the suite be rented out legally?

 

Will it be harder and/or more expensive to insure the property?

 

I suppose the answer to those may depend a lot on whether or not a variance was obtained but am generally interested to know what to look out for in these types of properties.

 

Mortgage; typically no.

 

Insurance; typically no.

 

Variance; typically no.

 

A few years ago Saanich did a study and found that there was approximately 9,000 suites and only 98 had a permit on file which would make 8002 suites non-conforming.  Probably similar situation in the City of Victoria.  I show houses for a living and it is fairly rare that I show a pre-2000 built home with a legal suite with the permit in place.

 

It seems as if people won't pay a premium for a permitted suite, it won't rent for more than an equivalent illegal suite, and the costs in getting the permits for a suite are absolutely insane and often it is not feasible. 100s of reasons behind this but I'll give you one example. Older homes either have a 1/2'' or 3/4'' cooper water supply.  If you want to legalize your suite most likely the city, amongst many other things, will decide because of your plumbing fixture load you need to upgrade to a 1'' line.  Their connection fee alone is $3,000 to $4,000 plus have you to trench your property, etc.  The cost for this item alone could run upwards of $7,000 to $10,000.  To legalize a suite can sometimes be in excess of $40,000-$50,000 so no one bothers to do it.

 

For the most part municipalities turn a blind eye to non-conforming suites.

.

That being said that link you provided is to a duplex which can be more interesting especially if your neighbour doesn't have a suite and you have to share the building insurance, etc.


Edited by MarkoJ, 15 February 2017 - 10:56 PM.

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#3 Love the rock

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Posted 15 February 2017 - 11:32 PM

Wasn't there a duplex in esquimalt with basement suites that
were ordered to stop renting even tho it had been a rented as a four plex for over 10
years .
Esquimalt told owners to turn it back into a duplex only ,both suites had to go .
If I'm not mistaken the new owner had bought it because it had a mortgage helper suite downstairs .
They felt secure buying because it had been rented for so long .
check news ran the story .

#4 Matt R.

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Posted 16 February 2017 - 12:47 AM

We lived in a duplex that had been converted to a fourplex on the corner of Wilson and Catherine (loved it) and the city, after sitting on it for a few years, decided to finally act on a complaint from someone.

We ended up just getting evicted.

Matt.

#5 Mike K.

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Posted 16 February 2017 - 05:07 AM

I can attest to the City of Victoria's requirement for the one inch pipe. The cost, all in, was $4,500 about a decade ago.

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#6 nagel

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Posted 16 February 2017 - 07:21 AM

I had a lot of fun digging my trench, and the district forgot to charge me for the hookup.



#7 Mike K.

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Posted 16 February 2017 - 08:01 AM

We lived in a duplex that had been converted to a fourplex on the corner of Wilson and Catherine (loved it) and the city, after sitting on it for a few years, decided to finally act on a complaint from someone.

We ended up just getting evicted.

Matt.

Sometimes companies will file a complaint. I've heard of people getting a knock on their door from municipal inspectors and bylaw after their tenant attempted to purchase tenant's insurance and some aspect of the suite had the broker file a complaint on behalf of the underwriter.

"The breaker keeps popping, you say? Better have an inspector check out the electrical!" And the rest is history.

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#8 Fat Tug

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Posted 16 February 2017 - 10:45 PM

Thanks for the input, though seems like there's a few different takes on what might happen if one owned this type of property. The lesson I'm taking away is that there is some amount of inherent risk that can only be allayed by doing a lot of due diligence and coming to terms with the fact that things might go sideways later on.



 



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