Buying or leasing a commercial strata unit in BC

Business owners buying an office, retail or industrial strata unit to use or rent out, and tenants leasing one. Think of an industrial unit in a newer Burnaby complex, or a medical office in a mixed-use building in Richmond.

• You own your unit and share the common property. The Strata corporation runs the shared parts under the Strata Property Act. See Strata Property Act (BC Laws).
• The BC Financial Services Authority (BCFSA) regulates real estate services in BC. The Form B information certificate, bylaws, minutes, budget and Depreciation report tell you what's coming. See BCFSA: Form B information certificate.
• A thin Contingency reserve fund (CRF) often means a Special levy is on the way.
• Bylaws can limit your use, signage, hours, parking and alterations, on top of zoning.
• In mixed-use buildings, commercial and residential owners may be split into sections with their own budgets.

Step 1: Check the use

Make sure your business is allowed under both the municipal zoning and the strata bylaws. A unit zoned for your use can still be off-limits if the bylaws say so. See Zoning and Development By-law (City of Vancouver).

Step 2: Read the documents

• Form B: fees, arrears, the CRF balance, any approved levies and legal actions.
• Bylaws and rules: uses, signage, parking, loading, noise, hours, alterations and rentals.
• Minutes: the last couple of years, including council and general meetings. Look for leaks, repairs, disputes and talk of levies.
• Budget and financial statements: what's being spent and saved.
• Depreciation report: major repairs expected in the coming years.
• Insurance certificate: what's covered and the deductibles you might be charged.
• Strata plan: your unit's boundaries, parking stalls and any limited common property.

The BC government's strata housing site explains the basics in plain language: Strata housing (Government of BC).

Step 3: Check the money

Compare the CRF with the work in the depreciation report. If the roof, envelope or parking membrane is due soon and the fund is small, plan for a levy. Ask the seller who pays levies approved before closing; the contract should say.

Step 4: Check the practical stuff

For industrial units: power, Clear height, loading, yard space and whether you can add a mezzanine. For retail: signage rights, frontage and shared hours. For office: heating, ventilation and air conditioning (HVAC), after-hours access and washrooms.

Step 5: If you'll lease it out

Check the rental bylaws and whether tenants have to sign a bylaw undertaking. Tenants: ask for the bylaws before you sign, because you'll have to follow them.

Mixed-use buildings

Where commercial and residential owners share a building, sections may separate budgets and decisions. Residential owners usually outnumber commercial ones, so understand how votes and costs are split. Lessons from BC's regulator include licensees failing to keep commercial and residential matters properly separated in mixed-use strata work.

See BCFSA: real estate disciplinary decisions.

Form B, depreciation report, and use bylaws

Commercial strata diligence includes the Form B information certificate, bylaws and use rules, the depreciation report, and the contingency reserve fund story. A unit that cannot run your use—or faces a special levy—is not a bargain at any cap rate.

Lenders may want their own notification filings after purchase. Budget time for strata documents the same way you budget for a building inspection.

Your lawyer reads the strata pile; I help you interpret the commercial impact.