Stratify Before Anyone Moves In

The Strata Property Regulation defines a previously occupied building as one that was occupied at any time, for any purpose (s.14.1). It names one exception: a unit the owner developer uses as a display lot, which means a show suite for buyers.

The definition covers any length of time and any person. The owner moving into one unit, a family member staying in another, a tenant on a short lease: each makes the whole building previously occupied. A brand-new fourplex with one unit lived in is on the same path as a 1970s duplex.

The rule looks at the moment the plan is deposited. Once the plan is at the Land Title Office and the strata lots exist, you can move into your own lot, rent it, or sell it. Since a 2022 change to the Strata Property Act, a strata cannot pass a bylaw that restricts rentals (s.141).

For a building that was never occupied, a BC land surveyor certifies that fact on Form S. The certificate must be dated no more than 180 days before the strata plan is tendered for deposit (s.241; Regulation s.14.5). No municipal or approving officer sign-off appears in the Act for this path.

The 180 days give you a window between the survey and the filing. If the lender is slow to sign, or the bylaws are not ready, and the window closes, the surveyor has to certify again. That second certificate is possible only if the building is still empty. Have the lender's signature, Form V, Form X and any custom bylaws on Form Y ready before the surveyor signs Form S.

An owner who builds a plex to live in one unit may move in as soon as the occupancy permit arrives and file the strata plan later. An owner who builds to rent may lease the units first and think about strata titles years later. Both end up on the conversion path under section 242.

On that path the city council, or an approving officer it names, decides. It must refuse unless the building substantially complies with its bylaws and the building regulations, and it must weigh the need for rental housing in the area, plans to relocate the people living there, the building's life and expected repair costs (s.242). Its decision is final. The city charges its own fee and can add conditions, such as tenant consent, a building report or a covenant.

Renting first adds more. A builder who rents out its own new units accounts for GST on fair market value when the first unit is leased or occupied (the self-supply rule, Canada Revenue Agency). If the building used the rental exemption from home warranty, a covenant on title bars the sale of any unit for 10 years from first occupancy (Homeowner Protection Act Regulation s.2). Whether stratifying after the self-supply rule applied changes the GST on a later sale is not confirmed by our sources.

Some cities close the door to later conversion in their own words. Nanaimo says stratification "must also occur at the time of construction, before the units are occupied, and all units must be stratified at the same time", and warns that previously occupied units must substantially meet current Building Code standards, "which may be difficult". Burnaby says that once occupied, the units "can only be stratified through a Strata Conversion application".

Of the cities we checked, one sets a step for a new building. The City of North Vancouver's Council Policy No. 4 says the intent to stratify "must be noted at the time that a building permit application is made". If you build there, state it on the application. Its Zoning Bylaw also says an accessory coach house, an accessory unit in a duplex and a lock-off unit cannot be stratified as separate units (s.507).

Vancouver acts at development permit instead. A new duplex or multiplex with suites or lock-offs gets a covenant that limits strata lots to the number of principal units, and a new house with a suite or laneway house gets a covenant that "prohibits registration of a strata plan". See the City of North Vancouver and Vancouver pages.

The deposit date starts other counts. From deposit, the strata corporation exists and the owner developer pays every strata expense until the end of the month in which the first lot is sold (s.7). The strata must insure the buildings at full replacement value (s.149).

The reserve fund payment at the first sale also grows with time. It is at least 10% of the interim budget's operating expenses if the first sale is within 1 year of deposit. After that, it is 10% for each year since deposit, up to 50% (s.12; Regulation s.3.01). If you plan to keep the units and sell some later, take that cost into account.

The Province exempts from speculation and vacancy tax a developer's new unit that was never occupied and is offered for sale in that calendar year. The Province's land under development page sets the conditions.

You can still get strata titles through a conversion. The test is whether the building was occupied at any time, so moving out leaves it previously occupied. Read the strata conversion guide for the steps and documents, and run the readiness check to see your city's fee.