Buildings with both Residential and Commercial Units

07.11.2014

East Van has a lot of residential buildings with commercial units on the ground level, typically in buildings near major streets like Main, Commercial Drive, Broadway, Hastings, etc. Residential and Commercial Strata’s are both run in a similar manner, but each have different priorities, building components and uses. How does this affect you as a residential owner? If you really want to dive in, you’ll be reading the fine print in the Strata Property Act which dictates every minor detail, however I’ll give you a quick recap now.

Living in a Condo with Commercial Units

One of the biggest considerations is what’s happening underneath you during the day and in the evening.

  • What type of businesses are they?
  • Will it cause excessive noise?
  • Are they open during the day, during the night, or both?
  • If you’re above a restaurant, where is the exhaust (and will you smell what they’re cooking?!)
  • How many commercial units are there compared to residential?
  • Is there a lot of visitor parking?

Keep in mind there would be a little more activity in the lane behind the building than there would be otherwise, if your unit is facing the lane.

Differences in the Organization of the Strata

When there are Commercial and Residential units in the same Strata, the different components and uses need to be considered when deciding who pays for repairs and upkeep. Of course, there are certain things that are strictly related to only Residential Units (i.e. most likely the elevator, their enterphone, their hallways, etc) and strictly related to only Commercial Units (i.e. they tend to use more electricity and gas than a typical residential unit), and things that would be joint costs (i.e. portions of the roof, parkade, exterior, etc).

Thanks to the Strata Property Act, expenses will be allocated appropriately, but there are different ways to do this based on how the Strata’s are organized. They can either be Multi Type or Multi Section (look in the bylaws to see how they’re organized):

  • Multi-Yype is much more straightforward and doesn’t add extra administrative duties (and therefore extra costs). The units are labeled to be either Residential or Commercial, but they are one legal entity and technically one Strata (therefore one AGM, etc). Operating Funds/Costs are then allocated based on being strictly Residential, strictly Commercial or a Joint Cost. However, Residential and Commercial share the Contingency Fund, meaning if repairs were not allocated to a type in the yearly operating fund and need to be financed by the Contingency (or a special levy), then Residential and Commercial owners both contribute (even if the repair is strictly one of the types).
  • Multi-Section is a little more confusing, with more administration duties, as there is one Joint Strata, with Residential and Commercial each having their own “mini” Strata as well. Because they’re each their own strata, they are two separate legal entities and follow Strata rules with their own AGM, budgets/finances, contingency, etc. The benefit of this is the costs of each section stay within each section. Each section can also maintain different bylaws (i.e. smoking can be allowed on the Commercial common property, but not allowed on Residential common property).

Strata Council meetings, and behind the scenes administrative duties would be a little more complicated with both Residential and Commercial Units in the same Strata, but there are bylaws to protect both types of Owners. The Real Estate Council of BC recently (in 2013) began a campaign to ensure that Strata Corporations were properly following the guidelines as per the Strata Property Act. For more information, take a look at this article.

All in all, there should be an understanding between the Residential Owner and Commercial Owners to maintain the space, respect their neighbours and be fair.

Another benefit? If you’re a fan of one of the business underneath and would happily go downstairs to enjoy a meal, a drink or a massage (or whatever strikes your fancy!) or if that’s your place of work – the commute couldn’t get much better!

 

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