Commercial Strata Special Assessments: Can You Pass the Cost to a Tenant?
A commercial strata owner should not assume a special levy becomes the tenant's bill merely because the lease is described as triple net. First establish the obligation to the strata corporation. Then establish whether the lease permits recovery of that particular cost, in what amount and on what schedule. Even an enforceable recovery can arrive long after the owner needs cash.
The practical answer may be full recovery, recovery spread over time, partial recovery or none. Those outcomes depend on the documents and facts. A strata resolution authorizing a roof project does not itself rewrite the lease between the unit owner and its tenant.
Keep the strata account and the lease account separate
BC's special-levy guidance describes money collected from strata lot owners for a stated purpose. The approving resolution identifies the amount allocated to each lot and payment dates. Obtain that resolution and the account for the actual lot; do not substitute the contractor's invoice date or the date someone forwarded the notice. BC special-levy guidance.
This article assumes an ordinary owner-to-commercial-tenant lease without a separate effective assignment of the owner's statutory powers and duties. Section 147 of the Strata Property Act provides for such assignments with notice requirements. The automatic long-term-lease provision in section 148 concerns residential strata lots; a three-year commercial lease should not be treated as falling within it merely because of its length. Strata Property Act, sections 147–148.
If the file includes an assignment or direct-payment arrangement, have its effect examined specifically. Otherwise, budget the owner's strata obligation independently of the tenant reimbursement. A tenant dispute is not a reason to assume the strata will extend its due date. Unpaid levies can lead to collection and lien consequences subject to the statutory process. Act, sections 108 and 112–116.
Follow the definitions all the way through
Find the lease's definitions of additional rent, operating costs, strata fees and capital expenditure. Then read exclusions, specific repair allocations, amortization provisions, caps and the reconciliation process together. A broad opening phrase can be qualified elsewhere.
One historical Richmond lease shows why the definitions matter. The December 15, 2017 agreement between 0937847 B.C. Ltd. and Omni Circuit Boards Ltd. included strata fees within additional rent, and its strata-fee definition expressly included special levies. It also provided for estimates, a later statement and tenant review of the charges. This is a particular negotiated agreement, not a conclusion about your lease or every capital project. Filed lease, definitions and section 3.2.
Compare the actual wording with these three possible structures:
| If the lease provides… | Question to resolve before billing |
|---|---|
| Express recovery of special levies, without an applicable exclusion | Does this levy fall within the clause, and when is reimbursement payable? |
| An exclusion for the relevant capital replacement | Does a more specific provision change that exclusion, or does the owner retain the cost? |
| Recovery of eligible capital cost through amortization | What is the eligible base, recovery period, permitted interest and tenant share during its remaining term? |
These are comparison possibilities, not model clauses ready to insert into a lease. Have counsel relate the whole agreement to the project before treating a large disputed charge as settled. The accounting label used by the strata is relevant information, but it is not necessarily the lease's contractual definition.
A recoverable cost can still require substantial owner cash
Suppose a hypothetical levy allocates $24,000 to one commercial strata lot. It is approved September 15, 2026 and payable November 1, 2026. The owner receives a supporting contractor invoice dated November 20. That later invoice does not, in this example, change the resolution's November 1 payment date.
Assume the lease has been reviewed and permits recovery of this eligible cost evenly over ten years, with no interest or administration fee. The agreed recovery starts January 1, 2027 at $200 a month: $24,000 ÷ 120 months. The tenant has only 36 paying months left. These are invented contract assumptions, not statutory amortization rules or market terms.
| Point in the example | Owner has paid to strata | Tenant recovery collected to date | Owner cash still unrecovered |
|---|---|---|---|
| November 1 payment | $24,000 | $0 | $24,000 |
| After 12 monthly tenant payments | $24,000 | $2,400 | $21,600 |
| After 36 monthly tenant payments | $24,000 | $7,200 | $16,800 |
Calling the project recoverable does not mean this tenant pays the whole $24,000 before leaving. Future recovery from a new tenant, an extension or a sale is not assumed. The owner must initially fund the full levy, and the example excludes financing costs, tax and collection risk.
If the actual lease instead supports full reimbursement 30 days after the owner's payment, the result changes: the owner may bridge the full amount for that period even if the tenant pays in full. If the relevant cost is excluded, the recovery column remains zero. Do not average these scenarios together and describe the result as a contractual entitlement.
Build a bill that explains the cost and the timing
Before sending a reimbursement demand, reconcile the lot's levy allocation with the amount you propose to charge. Attach or reference the governing clause, approved purpose, supporting project information, applicable exclusions and the calculation of the tenant's share. If amortization applies, show the eligible base and period rather than invoicing the full assessment under a generic operating-cost heading.
Keep expected recovery and actual receipts in separate columns. A charge entered into accounting software is not collected cash. Note the lease's notice, supporting-document and objection requirements so neither party mistakes an annual reconciliation for permission to ignore a contractual deadline.
If the project changes or money is returned, check what adjustment the lease requires. Avoid recovering the same expenditure once through the special levy and again through another operating-cost or capital-recovery line. The tenant should be able to trace the charge without reverse-engineering the landlord's entire strata account.
Buyers need a third line for the purchase adjustment
If a levy was approved before a sale, section 109 allocates the obligation to the strata by payment date: amounts payable before conveyance are owed by the seller, and amounts payable on or after conveyance by the purchaser. A purchase agreement may separately allocate the economic burden between buyer and seller; have that reflected in the closing arrangements. Act, section 109.
Do not confuse that buyer–seller allocation with tenant recovery. In the example, a buyer taking title October 15 faces the November 1 levy date under the stated assumptions. Whether it receives a seller credit and whether the tenant reimburses it are two further questions. Record all three cash movements, with their own dates and documents.
Our guide to commercial condo bylaws and owner-user checks covers the wider building restrictions. For this cost, the immediate task is narrower: establish the owner's due date, the tenant's actual payment obligation and the cash needed between them. Do not remove a levy from the purchase budget until that bridge is genuinely funded.
BC commercial leasing information checked September 8, 2026. The scenarios are hypothetical and do not determine liability, tax treatment or enforceability for a particular lease.
For a commercial condo purchase, contact JQ Properties with the levy resolution and actual tenant-recovery wording to organize the separate closing and cash-timing questions.
By Justin Qiao, Personal Real Estate Corporation, Justin Qiao Group | RE/MAX Crest Realty.
Sources checked September 9, 2026.
