“And Your Camp Shall Be Holy”
The Torah states, “And your camp shall be holy.” Our Sages (Berachot 26a) derived from here that one may not recite Keri’at Shema (or speak words of Torah or any other words of holiness) facing excrement and the like (see Shulchan Aruch Chapter 76 and on). This actually constitutes a Torah prohibition.
Maran Rabbeinu Ovadia Yosef zt”l was extremely careful in this regard and since he behaved as is expected from a Torah scholar who should not walk in filthy alleyways, he also did not step on sewage ditches, for an evil spirit rests there.
Similarly, it is a Torah prohibition to recite Keri’at Shema (or to speak words of Torah) while facing a toilet. Even if the toilet is currently clean, it is nevertheless forbidden to recite Keri’at Shema while facing it. Furthermore, even if the toilet is very far away, as long as one can see it, one may not recite Keri’at Shema, study Torah, or speak any words of holiness while facing it.
Even if the restroom has been scrubbed and cleaned very well, it is still forbidden to recite words of holiness while facing it just as it is forbidden to recite words of holiness while standing inside the restroom, for a toilet retains the same law as actual excrement in this context.
Nullifying a Restroom
If one has a bathroom at home and wishes to remodel it and turn it into another kind of room, one may do so by removing anything related to a bathroom and making an innate change to the format of the room. For instance, if one wishes to turn a bathroom into a bedroom or a storage room, one must remove the toilet and make new flooring after which it will be permissible to speak words of holiness even inside this room.