The Legal Frame | The 5-Unit Line
The Five-Unit REDMA Threshold
The Real Estate Development Marketing Act does not apply to every project that sells homes. It applies to a development property, and section 1 defines that term with a number. For strata lots the number is five. Everything in this hub follows from which side of it your building sits on.
Key takeaways
- Five or more strata lots makes a project a development property under REDMA section 1.
- Four units is outside the Act. No disclosure statement, no filed rescission right, no statutory deposit trust.
- The threshold counts lots, not size. A four-unit building with 3,000 square foot homes stays outside. A five-unit building of studios falls inside.
- Cooperative and shared interests use a threshold of two, not five, under s.1(d) and s.1(f).
- SSMUH zoning permits four to six units on a typical lot, so the same rezoning can land a project on either side.
What section 1 actually says
REDMA opens by defining its own scope. A development property is a parcel being developed into one of seven listed forms, and each form carries its own minimum count. For the forms a multiplex developer will encounter, the counts are: five or more subdivision lots, five or more bare land strata lots, five or more strata lots, five or more time share interests, and five or more leasehold units. Two forms use a lower floor: cooperative interests and shared interests both trigger at two.
A conventional BC multiplex sold unit by unit is a strata development, so the relevant count is five or more strata lots. Below five, the parcel is not a development property, and a statute that only regulates development properties has nothing to attach to.
This is a bright line rather than a judgement call. There is no discretion to apply REDMA to a four-unit project because it feels like a development, and no discretion to exempt a five-unit project because it is small. Counting the strata lots on the plan answers the question.
Why the line sits where multiplexes are built
When REDMA was drafted, the gap between a small private subdivision and a marketed development was wide. A five-lot floor separated a family splitting a lot from a company selling homes to strangers. Small-scale multi-unit housing has closed that gap. SSMUH rules permit three to six units on lots that previously held one house, and the resulting buildings are marketed to the public with floor plans and deposits, exactly like a condo, while frequently containing four homes.
The result is that the busiest form in BC's new housing supply sits one unit below the consumer protection regime. A fourplex developer marketing four presale units to four separate buyers is doing something REDMA was written to regulate, at a scale REDMA was written to exclude.
Nothing about this is a loophole being exploited. The Act's threshold predates the zoning that now produces so many four-unit buildings. It does mean a buyer's instinct about what protections exist is calibrated to the wrong building type.
The three things you lose below five units
The disclosure statement
No document must be filed with BCFSA, so no regulator reviews what the buyer is told about the project before money changes hands.
The seven-day rescission right
Section 21(2) gives a covered buyer seven days to walk away. On a four-unit build the buyer has whatever the contract grants, which may be nothing.
The deposit trust requirement
Section 18(1) forces deposits into a trust account held by a brokerage, lawyer, or notary. Below five units the developer may hold the money directly.
Each of these has its own page in this hub. The important point here is that they arrive together. Crossing from four units to five does not add one protection, it switches on the whole regime at once. A developer weighing a fourplex against a fiveplex is choosing between two different legal frameworks, and the cost difference is smaller than most expect: a nine-or-fewer-unit development pays a $900 filing fee.
How to count your own project
Count the strata lots that will exist on the deposited strata plan. A lock-off suite that shares a strata lot with the main home is not a separate lot and does not count. A garage or storage area held as limited common property is not a strata lot. Four homes plus four parking stalls held as limited common property is a four-lot strata.
Where a project is phased under Part 13 of the Strata Property Act, count the units across the whole declared development rather than the units in the first phase. A developer who files a Form P declaring six units across two phases of three has declared a six-unit development.
If the count is four and the design has any flexibility left, this is worth a deliberate decision rather than an accident of layout. Adding a fifth unit changes the sales process, the filing obligations, and what a buyer's lawyer will expect to see.
What the threshold does not change
Falling below the five-unit floor exempts a project from REDMA and from nothing else. Several obligations that developers assume are part of the same package sit in different statutes with no unit threshold at all.
Mandatory home warranty insurance is the clearest example. Section 22(2) of the Homeowner Protection Act requires two years of coverage on materials and labour, five years on the building envelope, and ten years on structural defects. It applies to a new home. A four-unit building produces four new homes, so it produces four warranties.
Stratification is the second. Selling units separately requires a strata plan deposited under the Strata Property Act regardless of how many units there are, because separate titles are what a buyer's lender needs to register a mortgage. A two-lot strata goes through the same deposit process as a twenty-lot strata.
GST is the third. A newly built residential unit sold by a builder is a taxable supply whether the building holds two units or fifty. The five-unit line is a consumer-protection threshold in one Act, and reading it as a general exemption for small projects is the most expensive misunderstanding available here.
The question a buyer should ask
A buyer looking at a presale multiplex unit can settle their exposure with one question: how many strata lots will the completed plan create? Five or more means a disclosure statement exists and can be requested, deposits are held in trust by a brokerage, lawyer, or notary, and a seven-day cancellation right applies.
Four or fewer means the answers come from the purchase agreement instead. That is a workable position when the agreement names the trust account holding the deposit and states the completion obligations plainly. It is a poor position when the agreement is silent and the buyer assumed statute filled the gap. Reading the deposit clause before signing is the entire protection available on a four-unit build.
Best for, fails when, verify before
Staying under five works when
The lot only supports four units anyway, the buyers are known parties, or the plan is to hold and rent rather than sell.
It fails when
You market presales to the public and a buyer's lawyer asks which trust account holds the deposit. Absent a contractual answer, deals stall here.
Verify before you market
The final strata lot count on the plan, whether any phasing declaration raises it, and what your purchase agreement says about deposits.
Why the count is settled at design, not at sale
By the time a project is marketed, the unit count is fixed. It was determined by the zoning permission, the site plan, the parking layout, and the building permit drawings. Changing it afterwards means redrawing, resubmitting, and in most cases rebuilding.
This is why the threshold belongs in an early design conversation rather than a late legal one. A lot that can carry five units and is being designed for four is making a legal choice through an architectural decision. That choice may well be correct, because a fifth unit costs money to build and may not clear its own cost. It should be made knowingly.
The reverse case matters too. A lot designed for six units is inside REDMA and will need a disclosure statement prepared before marketing starts. Budget the legal work and the $900 filing fee at design stage rather than discovering them when the sales launch is already booked.
Where to go next
- Filing a disclosure statement covers what the document contains and what filing costs.
- Deposits and trust accounts covers where the money must sit on each side of the line.
- Strata or sell whole covers avoiding unit sales altogether.
Frequently asked questions
What is the exact REDMA threshold for strata lots? +
REDMA section 1 defines a development property to include a parcel being developed into five or more strata lots. Five is the floor. A four-lot strata is not a development property and the Act does not apply to it. The same five-unit floor covers subdivision lots, bare land strata lots, time share interests, and leasehold units.
Does a fourplex need to comply with REDMA in BC? +
No. A fourplex sold as four strata lots falls below the five-lot floor in REDMA section 1, so the Act does not apply. The developer files no disclosure statement, owes no statutory deposit trust duty under section 18, and the buyers get no seven-day rescission right under section 21(2). Any equivalent protection has to be written into the purchase agreement.
Is the REDMA threshold based on unit size or unit count? +
Unit count. REDMA section 1 counts strata lots and says nothing about floor area, bedroom count, or sale price. A four-unit building of 3,000 square foot homes stays outside the Act, and a five-unit building of studio apartments falls inside it. Counting the lots on the strata plan settles the question.
Do cooperative interests use the same five-unit threshold? +
No. REDMA section 1 sets the floor at two for cooperative interests under paragraph (d) and at two for shared interests under paragraph (f). Only subdivision lots, bare land strata lots, strata lots, time share interests, and leasehold units use the five-unit floor. A two-unit cooperative is a development property even though a two-unit strata is not.
How does SSMUH zoning interact with the five-unit line? +
BC's small-scale multi-unit housing rules commonly permit three to six units on a lot that previously held one house. That range straddles the REDMA floor of five. The same zoning permission can produce a four-unit building outside the Act or a six-unit building inside it, which is why the threshold now matters to ordinary residential lots.
Does a lock-off suite count as a separate strata lot? +
Only if it is created as its own strata lot on the deposited plan. A lock-off that shares a strata lot with the main home is part of that one lot and does not raise the count. What matters is the number of separate legal titles the strata plan creates, not the number of kitchens or separate entrances the building has.
How do phased developments affect the unit count? +
Count the units across the whole declared development, not just the first phase. Where a developer files a Phased Strata Plan Declaration in Form P under Part 13 of the Strata Property Act declaring six units across two phases of three, that is a six-unit development. Splitting a project into phases does not bring it under the five-unit floor.
Can I choose to comply with REDMA voluntarily on a four-unit build? +
You can give buyers equivalent protections by contract, which is the practical route. Require deposits to be held in a lawyer or brokerage trust account, and grant a written cancellation period. Those terms bind because both parties agreed to them. A four-lot project is still not a development property, so a voluntary filing does not make the statutory regime apply.
What does it cost to cross the five-unit line? +
The filing fee itself is $900 for a development of nine or fewer units, set on 1 January 2019, plus $600 for each amendment to a filed disclosure statement. The larger costs are the legal work to prepare the disclosure statement and the discipline of amending it when material facts change. The fee is rarely what decides a fourplex against a fiveplex.
Who enforces the REDMA threshold? +
The BC Financial Services Authority administers REDMA and receives disclosure statement filings from developers. BCFSA also publishes the Policy Statements that set out how early marketing periods work. A developer of five or more units who markets without filing is marketing in contravention of the Act, and BCFSA is the body that acts on it.
Does the threshold apply to rental buildings? +
REDMA regulates the marketing of development units for sale, and for leases longer than three years. A multiplex built and held as rental with ordinary monthly tenancies is not being marketed as development units, so the Act is not engaged. The threshold becomes relevant at the point the owner decides to stratify and sell the units.
Should I add a fifth unit just to get inside REDMA? +
Only if the fifth unit works on its own merits. The zoning has to permit it, the lot has to hold it, and the construction cost has to be justified by the sale price. Buyer confidence from a filed disclosure statement is a real benefit on a presale, and the $900 filing fee is small, but neither justifies a unit the site cannot carry.
Sources and references
Thresholds quoted from the definition of "development property" in REDMA section 1, read 6 September 2026.
See What Your Lot Can Build and Sell
Enter any BC address to see how many units the zoning allows, which side of the five-unit REDMA line that puts you on, and what the return looks like.