SWG PROPERTY: Rooming Houses

Jun 2021

Securing an affordable rental in major cities like Toronto is getting more difficult. According to recent reporting on Rental.ca, monthly rent averages between $1,500 and $2,500 depending on the property type. (1)

One affordable option for students and those with a low to lower-middle income is a rooming house, and it comes with its own unique insurance needs.

Defining what exactly constitutes a rooming house can be confusing, as it has evolved over time. The city of Toronto describes a rooming house as “a house, apartment or building where you share a kitchen and/or washroom with four or more people that pay individual rent.”

More specifically, a rooming house is defined as follows:

  • It must be a self-contained unit where the dwelling rooms total 3 or more, provided in exchange for remuneration per dwelling.
  • The residents in each dwelling room are unrelated.
  • The separate residents share the bathroom and/or kitchen facilities that are inside of that self-contained unit.

Brokers who represent rooming house property owners should be aware of both the regulatory landscape and the common exposures of this hard-to-place market so they can offer the right converge for their clients.

Upcoming Regulatory Changes in 2021

Rooming house arrangements have operated in a legal grey area for some time now. There has been resistance to their use by nearby suburban homeowners.

However, these attitudes have been changing as rental prices rise and the pandemic leads to more widespread and intensifying financial stress. (2) Although zoning bylaws have prohibited such housing in suburban areas, they have been around since the turn of the century.

Unfortunately, the lack of regulation and not being legalized has created difficult situations for tenants of rooming houses. If they have problems as tenants, they have nowhere to turn to file a complaint. But lack of affordable rentals is a human rights issue as so many of the people that need this affordability are immigrants, have disabilities, and have low income.

Toronto recently adopted a human rights-based approach to housing last year and is now developing plans to allow rooming houses not just in places like Toronto, Scarborough, York, and Etobicoke where it has been illegal, but everywhere.

Some of the changes include:

  • Except in dense residential-commercial zones or apartment neighborhoods, rooming houses will be limited to six dwelling rooms.
  • Owners would have to submit floor plans, renovate to comply with the building code, keep to a property maintenance plan, and demonstrate they can respond to tenant concerns. (2)

These changes will increase safety and stability and meet a need in an unaffordable market.

Understanding the Liability Risks for Property Owners of Rooming Houses

With the growth and regulation of this market comes unique and changing risks. Property wear and tear, for instance, will be greater and it can be more challenging to hold someone accountable for damages, especially to common areas. For example, what if none of the tenants will admit fault to damage?

In addition, there have been a number of fatalities from fires over the last few years. In a recent case, an international student perished in a house fire in Scarborough and the property owners are facing 22 charges. (3)

Many claims are turned down because property owners either failed to inform their insurance provider of changes in occupancy, or failed to follow guidelines like fire codes.

SWG PROPERTY: Commercial Property Insurance

SWG PROPERTY – Commercial Property Liability is designed to cover hard-to-place property accounts. We can accommodate most realty-type risks, from stand-alone rentals and vacant dwellings to large commercial risks, with an in-house capacity of up to $6,000,000.

Coverage Highlights:

  • Named Perils
  • ACV
  • Dependent on individual risk, age, construction, occupancy, and town grade

Other Coverages Include:

  • Business Interruption, Rental Income
  • Mechanical Breakdown


Most realty type risks are written on a “Premises” type form but full CGLs including Tenant’s Legal Liability are available.

We Also Cover:

  • Apartment Houses (with/out commercial occupancies)
  • Campgrounds
  • Food Trucks/Hotdog Carts/Chip Trucks
  • Hotels/Motels
  • Rented Dwellings
  • Retail Stores
  • Strip Plazas
  • Student Housing
  • Vacant Property

Visit the SWG product page for more information: https://swgins.com/product/swg-property.html

Content is current as of the date of broadcast and is subject to change without notice.


  1. https://rentals.ca/national-rent-report
  2. https://www.toronto.com/news-story/10387900–status-quo-isn-t-working-toronto-proposing-city-wide-rules-for-legal-rooming-houses/
  3. https://www.cbc.ca/news/canada/toronto/scarborough-rooming-house-fire-1.4817402