renting out a basement apartment.

[Shibu Thomas]

I've had a 2family house in the greenville section of jersey city for the past 10yrs.  I bought it way too high in 2005 so no point in selling anytime soon.  the place came w/ a fully liveable basement, including kitchen, shower bathroom the rooms have windows.  But still it is illegal i think b/c of the door or maybe ceiling height.  Its in a 2family zone R1 i think its called.  I actually got ratted out by a rotten tennant years ago and an inspection took place, where i had to kick out the basement tennant give her back her rent.  But the inspection went fine, in and out b/c i removed the stove and applainces.  It was a big mess.  Im wondering if anyone out there has experience in NJ maybe even JC.  where how difficult it would be to get a variance to make the basement a legal rental?  I think my neigbor did it a few years back but not sure if he is claiming it as Owner occupied and just rents it out?  Could use some good ideas right about now :)

[John Errico]

Agree with Joe, but I'll add that I had a neighbor do this (I am in Union City) and it was an expensive process. 

There are a ton of illegal basement apartments all around Hudson County--maybe 10-15 years ago there was a program (at least in Union City) where many of these apartments were made legal, I think partly as a way for the city to generate revenue, and partly as a way for the city to have some oversight, since people were renting these apartments out regardless of their legality. 

My neighbor did this during one those programs (had a 2 family, made into a legal 3 family by converting the basement) but, among other things, he had to install a fire suppression system in the basement, expand windows for egress/ingress purposes, and do a whole bunch of other things. The ceiling height of the basement is only about ~6.5 feet, so it's really on the marginal side of livability for most people. I think he ended up spending 30-40k for the fire suppression system, windows, and whatever else the city required... and I'm not even sure this is possible anymore, since I think Union City's program is not going on anymore, and, in general, they require showing off-street parking.

I'm uncertain if the economics will make sense for you, although I'm not sure what JC may require or how your basement looks now. Definitely go the legal route here, don't rent out the basement unless you have the OK from the relevant authorities--it's regulated for a reason (fire safety, carbon monoxide poisoning, etc.) and your insurance will not have your back if something goes wrong.