Commercial leasing: what to check before you sign a lease

A commercial lease is a contract, outside the Residential Tenancy Act

In most cases the Residential Tenancy Act does not apply to commercial tenancies, and the RTB has no jurisdiction. A landlord's remedies when a tenant does not pay rent come from the Commercial Tenancy Act and the Rent Distress Act; lease disputes go to the Civil Resolution Tribunal or the courts, and the CRT hears small claims up to $5,000 but not some claims about land.

So the protections residential tenants have, such as the yearly rent increase limit, do not apply to commercial tenants; everything depends on the lease.

Who can negotiate a lease for you

Finding a tenant or space, or negotiating lease terms, for someone else in return for payment requires a real estate licence under BC's Real Estate Services Act; an owner leasing their own property needs none. Collecting rent and managing a building is rental property management, which needs a separate licence. I provide trading services — finding and negotiating — not property management.

The offer to lease comes first, and the rent needs working out

A commercial lease usually starts with an offer to lease that settles the main terms, followed by a formal lease drafted by a lawyer. Whether the offer is binding should be spelled out.

How rent is calculated: net or triple-net leases are common, meaning a fixed base rent plus additional rent (operating costs, property taxes and so on) shared by floor area. When you compare two spaces, include the additional rent.

The clauses that matter most

The City of Vancouver's lease negotiation guide for small businesses flags options to renew (whether and at what rent you can extend), redevelopment, demolition or sale clauses (which let the landlord end the lease early), and tenant incentives (free rent, improvement allowances or cash).

The Law Society of BC's checklist for lawyers adds guarantees or indemnities, security deposits or letters of credit, rights or prohibitions on assignment and subletting (a buyer of your business will want the lease), and whether the lease should be registered at the Land Title Office.

A permitted-use clause written too narrowly can block you from changing your business later, so I negotiate that as well.

Registering the lease, and what happens if the building is sold

Under BC's Land Title Act, a lease of three years or less with actual occupation binds a buyer of the building without registration; for longer leases, registration is what protects the tenant, so have a lawyer review it.

Registering a lease with more than 30 years remaining, including all renewal options, triggers property transfer tax; 30 years or less is exempt.

Tax: GST on rent, and PST on commissions is paused

Commercial rent is subject to 5% GST; commercial rent generally does not attract PST.

The province had planned to apply 7% PST to real estate services for non-residential property, including commercial leasing commissions, from October 1, 2026. On September 18, 2026 it announced that this expansion is paused, and no new date has been posted.

Check with the city before you sign

In Vancouver every business needs a licence, and the city advises checking a location with its Development and Building Services Centre before you lease or buy space. A change of use counts as development and may need a development permit; an occupancy permit is required before occupying space in a commercial building, including after a change of use; and a restaurant's kitchen ventilation and fire protection need a building permit.

That is why I put city confirmation of the use and licence into the offer to lease as a condition.

How I work on a lease

For tenants: the use, the size and the budget (base plus additional rent) first, then the search; in the offer to lease, renewal options, demolition clauses, free rent and improvement allowances, and assignment rights come first.

For owners: setting the rent, reviewing the tenant's business and guarantees, and writing down exactly how additional rent is shared.

Whether to lease or buy is covered in my lease-or-buy guide; buying commercial property is on my commercial property page.

Common questions

Does the Residential Tenancy Act apply to a commercial lease in BC?

Generally not, and the RTB does not hear commercial disputes. A commercial lease is a contract; disputes go to the Civil Resolution Tribunal (small claims up to $5,000) or the courts.

What is a triple-net (NNN) lease?

The tenant pays a fixed base rent plus a share of additional rent — operating costs, property taxes and so on — based on floor area. Compare spaces with the additional rent included.

Is an offer to lease binding in BC?

It depends on how it is written. The Law Society of BC's checklist for lawyers lists the binding effect of the offer as a point to settle first, so spell it out before you sign, or have a lawyer review it.

Is GST charged on commercial rent in BC?

Yes, at 5%. Commercial rent generally does not attract PST.

Is my commercial lease protected if the building is sold?

A lease of three years or less that you actually occupy binds a new owner without registration; for a longer lease, registration is what protects you, so have a lawyer review it.

What should I check with the City of Vancouver before signing a commercial lease?

Whether your business is allowed at that address; every business needs a licence; a change of use may need a development permit, and you need an occupancy permit before moving in; a restaurant's kitchen ventilation needs a building permit.