With the rising cost of living, many homeowners have created secondary suites to rent out to help offset costs. However, not all suites are legal.

Remember, it is your legal duty as a REALTOR^® to indicate correct listing details. This includes doing your due diligence to verify if a secondary suite is legal or illegal.For properties in Calgary, this can easily be completed by visiting the City of Calgary’s registry for secondary suites.

Other tips to consider when listing properties with a suite include:

Don’t use jargon

Comments about any listing must be accurate and not misrepresent the property.

Terms like “mother-in-law”, “nanny suite”, "carriage suite", “conforming”, and “non-conforming” are not substitutes for stating if a suite is legal or illegal.

To ensure the listing contains complete information, you must clearly indicate the legality whenever the word “suite” is used. This disclosure is also required by REIX, as misstating the legality of a suite could have implication for Errors & Omissions Insurance coverage.

Disclose on all platforms

Proper disclosure goes beyond entering information in the suite field on the MLS^® System.

If you choose to reference a suite in your advertising or on websites, we recommend that the words legal or illegal accompany every reference to the suite.

If advertising a suite in the public remarks on the MLS^® System listing and the word "suite" is used, the word legal or illegal must also be included next to each "suite" statement. Listings that don’t include the required legal or illegal disclosure each time "suite" is referenced, are considered to have incomplete information.

Scrap the money makers

Avoid terms like “rent down”, “excellent source of revenue”, “income potential”, and “mortgage helper” when describing an illegal suite.

REIX may deny you coverage if you use terms that reference possible income on an illegal suite. If you entice someone to purchase a property under false pretenses, REIX considers this fraud.

Future use, future problems

CREB^® requires that all remarks about a property are accurate and reflect its current use.

Avoid mention and promotion of the potential future uses or alterations of a property – this is risky for both the seller and the listing agent. REIX could deny coverage if an issue arose surrounding this type of advertising claim, so avoid terms like “easy to suite” or “potential for suite”.

If the listing agent wants to indicate that a property is zoned for a secondary suite, an additional statement must be included to indicate that potential buyers have to adhere to municipal regulations if they’re considering altering the property for a suite. For example, "a secondary suite would be subject to approval and permitting by the city/municipality" or "a basement suite would be subject to approval and permitting by the city/municipality" are recommended phrases to ensure the listing information is complete.

Listing policy

If CREB^® discovers listings that don't meet the required legality of suite disclosure, or a listing that promotes the potential of a suite, the listing agent will be notified so they can make the appropriate adjustments in a timely manner. 

This REALTips article is to help members avoid the top five rules violations, stay tuned for more practice advice next week. 

For questions about the disclosure of secondary suites, please contact crebmp@creb.ca.