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I am close to completing a legal basement suite in Calgary. I want to apply for a second address with the city, but have been told there may be title issues when we sell since there are three investors on title with the original single address. I was hoping someone could clarify the risks for me.

If I understand correctly, there are actually two separate topics here. First, if you have a legal basement suite, then you have applied for and obtained all the necessary permits and, presumably, have confirmed that the property is zoned for such use. You now want to “register” that suite or unit with Calgary. If so, then you don’t have any major issue with getting an address associated with it. In fact, that is a distinct benefit of registering the secondary unit with a municipality. Assigning a new address provides safety (emergency services will know about it), convenience (Canada Post and couriers will have a mailing address to deliver to), and practicality (separate garbage pickup and proper insurance coverage available for example).

A second topic is the one you allude to – title. But unless I misunderstand the facts, that will not be an issue. Getting a second address for a basement suite does not mean you are subdividing title or impacting title in any way. There will still be one title to the property. The three owners currently on title will still own the land and building in exactly the same way they do now. They will just own a home with two addresses associated with it.

But there are risks – not with getting a second address – but rather with creating a separate legal suite. As alluded to above, be sure to have and maintain proper insurance and make sure the tenant does too. Also, be aware that property taxes will likely increase, since the municipality will likely assess it as having a higher value. There may also be tax implications at the time of sale even if you live in the other suite – there may be capital gains to deal with in relation to the value assigned to the basement suite.

Hope all goes well and congratulations on adding that basement suite!

Darren Richards is a partner with Richards Hunter Toogood. He focuses on both residential and commercial Real Estate and Corporate/Commercial Law serving both small and medium sized owner-managed business in the Edmonton and surrounding region. Mr. Richards also acts for major banking institutions and other lenders in relation to their commercial loan facilities. Reach him at: d.richards@rht-law.ca.      

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