Residential real estate investors investing in a residential property with four or fewer units must understand the legal standards governing such properties or buildings. This understanding is advantageous in making righteous decisions both during and after acquiring such a piece of real estate. These include zoning bylaw laws, property and occupancy standards, public health and safety standards, and other legislative requirements for accessory or secondary dwelling units. Not following such regulations can have legal implications that can hinder investment projects. Before digging into these factors, it is necessary to understand what a dwelling unit is.
What is a Dwelling Unit?
One or more habitable rooms can be defined as a “dwelling unit” if they have autonomous cooking, eating, sleeping and sanitary facilities. Regardless of who lives there, whether a family member or a tenant who pays or doesn’t pay rent, a housing unit that meets these criteria is deemed a residence. An attached structure having more than one living unit is known as a multi-unit residential structure. A single-family detached home is a structure that has only one dwelling unit, whereas a multi-family home includes several. Residential zoning bylaws employ this language to differentiate between single- and multiple-unit dwellings. Multi-unit residential dwellings such as a duplex, triplex, and fourplex are common examples. Duplexes are single-family homes that are partitioned into two separate but connected dwelling units. A triplex and a fourplex are both made up of three and four independent residential units, respectively. The entrance is either unique or shared via an exterior hallway or vestibule, depending on the situation.
Legal Factors influencing structures with four or fewer dwelling units:
How do Zoning Bylaws Impact Residential Real Estate Investment?
Zoning laws control the use of land for various purposes within a community or neighbourhood. They define how land or piece of real estate may be utilized, the locations of buildings and other structures, the types of buildings or facilities that are authorized and their permissible uses, the sizes and dimensions of lots, parking requirements, and the heights of buildings and their setbacks from the street or roads.
It would be prudent to ascertain the answers to questions such as what zoning exists in this locality, what the plan is for vacant land in a specific area, and whether any zoning designation currently or in the future restricts the construction of accessory units, basements, or other structures, or imposes further restrictions. The local municipality’s website typically includes zoning rules, bylaws, and maps, which can be consulted while researching the property. It is highly paramount to conduct a detailed investigation ahead as this can directly impact the value of the real estate you are investing in or its future use.
Let’s say you want to acquire land and plans to build a fourplex in it, a community with a blend of single-family houses, duplexes, and triplexes. Consider deciding simply based on existing arrangements and buying that lot to build a fourplex. As long as there was no change in the planning and zoning was the same, this is fine. But if the recent changes in local zoning bylaw only allow single-family home construction, the future uses of your land may be limited. And your only other option is to build a single-family residence.
How does Legislation impact Residential Real Estate Investment Properties?
As a residential property investor, it is vital to develop and maintain the building or structure according to municipal property and occupancy standards devised to safeguard residents’ or renters’ health and safety and guarantee that facilities meet basic upkeep requirements. Municipal ordinances create basic standards for property owners to follow to preserve their property’s attractiveness and a safe living environment.
It is compulsory to maintain these standards for any residential investment property, which may include but is not limited to the following:
- According to local or provincial building code requirements, any unit’s floor, walls, and stairs must be built safely. Doors, windows, and HVAC systems should comply with in place safety standards.
- Exterior walls, roofs, balconies, or exterior stairs, fences, garages, or sheds should comply with local building code and safety requirements.
- It is imperative that all plumbing and septic systems are functioning correctly and maintained according to local governance regulations.
- Similarly, electrical systems should comply with local or provincial electrical codes, ensuring unit occupants’ safety and safeguarding from fires and short circuits.
Furthermore, if you are constructing a structure or building of your own after purchasing the land or if the health and safety criteria or standards set by the Fire Code are altered or enhanced, the amendments, then the investor must incorporate these in their residential investment property.
What are the minimum requirements for Accessory or Secondary Dwelling Units?
Suppose you purchase a resale property and plan on building additional accessory units to the structure. In that case, you must understand the minimum requirements and determine if an ancillary unit is feasible under these conditions.
Before investing money in such plans, Investors need to consider many things before adding an accessory unit. This could include finding municipal zoning requirements, necessary building permits, constructing units complying with the aforementioned safety and health requirements, and meeting the building construction inspection standards. For instance, the Building Code requires an accessory unit with a light switch in each room and area and a switch at the top and bottom of the stairs to guarantee appropriate illumination.
Additionally, you must comply with the legal requirements for constructing and maintaining a dwelling unit or units in these structures according to the health and safety standards set by local building regulations and zoning. More information regarding zoning and building laws in your area may be obtained by contacting the municipal offices directly or by visiting the municipal offices’ official website. Also, there is the option of hiring a well-versed realtor to undertake the necessary research on your behalf. Additionally, while making an informed choice, it is critical to cross-reference the information from numerous sources.
