"He wouldn't properly fix the toilet and resulting from that I have some serious problems plus I have two kids..." How are your 2 kids the LL's fault or a function of the unfixed toilet? If the kids are a result of the toilet problem, it sounds like you were probably misusing the toilet!
Seriously, there are very few problems with a toilet that take more than 5 minutes to repair. Why didn't you repair the toilet and simply offset the cost against your rent, assuming that is allowed in your state?
As for the illegal apartment. You are receiving the benefit of a roof over your head in exchange for payment. Whether the LL has required administrative permits is not likely to change your obligation to pay rent under the lease (contract). Check with your local authority, but your obligation to pay rent will probably be upheld in court and you will have a nice big black mark on your credit as a result of the suit. That will make you less desirable as a tenant than you already are.