This week I had two different clients contact their city planning departments about adding in a second unit to their newly purchased rental properties. They both received quite the sticker shock when they were informed that they had to pay several additional charges on top of their permit fees. These included parkland fees, school board fees, and developments charges to the tune of just under $10,000.
After some clarification, it turned out that these fees didn't apply. That's because what we were doing was putting in a secondary suite, and not "duplexing" the property.
What's The Difference You Ask?
Secondary suites are also called accessory suites, in-law suite, nanny suites, and granny suites. Homes containing one of these however, is not considered a duplex. If you are simply trying to legalize a basement suite, you shouldn’t apply for converting it into a duplex, because this can land you in a different category of housing when you apply for your permits, and can result in unnecessary spending.
In addition to potential city fees, you might also be subject to additional work in the house that might run you an extra $15,000 to $20,000.
The difference between a duplex and a secondary suite is defined by each city’s planning department, not the building code. The building code is sort of agnostic to the semantics, and simply calls either of them two-unit dwellings.
So what are the key differences that can cost you an extra $25,000 if you don’t define it properly?
1. Size Of The Unit
Each city will define what would be considered a secondary suite in terms of size. Some will say it has to be a maximum of 40% of the main unit, and some might say it has to be 50% or less, and some might even have a minimum and maximum overall size. In a duplex, it doesn’t matter if the lower unit is larger than the upper unit, and vice versa.
Duplexes are mostly designed to be duplexes from the get-go, whereas secondary suites are always added in after the fact. This means that the units inside of a duplex are comparable in size. Most secondary suites are basement apartments that are much smaller than the upper unit.
2. Duplexes Can Be Old Or New – Secondary Suites Are Older Than 5 Years
New properties can be designed to be duplexes, or can be converted to a duplex soon after it was built. In most cities, the by-laws dictate that you can only add in a secondary suite to a home at least 5 years after it was built.
3. Duplexes Have Their Own Mechanical Systems And Electrical Meters – Homes Containing Secondary Suites Have Shared Systems
Because most duplexes were designed as such from the beginning, the combined square footage of duplexes are generally much bigger than a home with a secondary suite. Because of this, each unit within a duplex would necessitate its own heating and cooling systems. It is also a consideration for fire safety, as smoke and fire can also spread through the ducts.
Secondary suites, most often using the existing basement suite, has already been accounted for in terms of heating requirements. To address the fire issue, the code has permitted a workaround, which is the installation of an in-duct smoke detector.
Stating that you are "duplexing" your home will likely result in the city asking you to put in 2 separate heating systems with its own duct work.
Keep in mind also that the party separation between units in a duplex are a lot more detailed compared with a secondary suite, and certain plumbing systems may also need to be different.
I've had two occasions where consultation clients had previous properties where their architect had indicated on the permit drawings that it is new duplex, and they were subsequently required to put in an additional heating and cooling system, as well as new ducts for the unit. This added about $15,000 to the job.
This is also the case for the electrical system. Usually duplexes have their own meters each supplying 100amp service to each unit, while secondary suites typically piggy back off the main unit, which may or may not be adequate. If you're applying to convert to a duplex however, you'll likely need to put in a new meter and panel.
So, wording can make a big difference!
4. Zoning Can Be Different
An area zoned for duplexes may not necessarily be an area zoned to allow secondary suites and vice versa. Although Bill 140 had sweeping changes across Ontario to allow secondary suites, it still doesn't apply everywhere.
The zoning can also affect physical attributes of the house. For example, secondary suites generally don't allow the facade of the house to be altered (i.e. adding in a new front door), whereas this may not affect duplexes.
Which One Is Better?
There is no right or wrong answer here. Generally, a duplex is likely going to cost more when you buy, but it's also better since it's already defined as that and likely has separate HVAC and electrical systems. It would also be easier to upgrade to a triplex later on, compared to a home with a secondary suite.
On the other hand, if you are considering buying a single family home or you already own one, and you wish to add in another unit, doing it as a secondary suite instead of a duplex would be much more cost effective. This applies to both the construction costs, as well as any fees from the city.
The City Defines What It Is
Ultimately it is up to the specific city to decide whether the property is defined as a duplex or a home with a secondary suite.
When you're buying a home, make sure what the listing says matches with what the city has on record. MLS listings will have all kinds of inaccurate information. What counts at the end of the day is what the city has on file. You just want to make sure you pay for what they say it is.
It's not uncommon for someone to have divided up an old single family Victorian home into three units 40 years ago, and then sell the property as a triplex. If the area is not zoned for that, and it's not registered with the city, you can be in hot water and you likely overpaid for the property.
Work With Someone In The Know
The differences described above are general in nature, and it really depends on each city. There are also exceptions, so always work with Realtors, Lawyers, Designers and Architects who know the rules in your city, not just the person that's going to cut you a deal.
As the saying goes, you either pay now, or you pay later! Usually now is cheaper.