Long term residential leases
Some residential properties in B.C. are long term leaseholds (leased housing) that can be bought and sold to the end of a contract. While commercial leaseholds are very common, residential leaseholds are not.
This type of lease is not governed by the Residential Tenancy Act (unless the leasehold owner has rented out the unit) or the Strata Property Act.
Learn more on this page about:
Understanding a long term residential lease
Not regulated by the Residential Tenancy Act or the Strata Property Act
How long term residential leaseholds work
Home owner grant
Property Transfer Tax
Sometimes a long term lease is referred to as a ’99-year lease’ or a ‘leasehold unit’.
Leasehold owners are sometimes called the leaseholder or the lessee. It is ownership of a right of occupancy for the term of the lease.
Right to Occupy a Premise: a long-term residential lease is a form of home ownership where a person (the lessee, or leaseholder) purchases from the owner of a building or a lot (the lessor or leasehold landlord) the right to occupy a premise (either an apartment suite or a house) for a long-term, fixed period (more than 20 years, and usually for 99 years).
Fees and Taxes: The leaseholder also pays for the maintenance and repair of the building as determined by the leasehold landlord, usually in the form of monthly fees. These fees cover regular maintenance of the building and thus are not ‘rent’ or 'strata fees'. The leaseholder also usually pays property taxes.
Buying and selling: Once purchased, the ‘right of occupancy’ can be bought and sold in a conventional real estate market, although some oversight of these transactions is typically retained by the leasehold landlord. The value of the lease tends to decline as the lease term approaches its termination date, but will fluctuate over time with market values.
Consult a lawyer before purchasing: before buying a residential leasehold, prospective purchasers are strongly advised to consult a knowledgeable lawyer to thoroughly understand the contract and its obligations.
Long term residential leaseholds are not governed by the Residential Tenancy Act. Leases with a term longer than 20 years fall outside the scope of the Residential Tenancy Act, as long-term leaseholders are not considered to be renters. However, if long-term leaseholders rent their unit to a tenant, the Residential Tenancy Act applies to that relationship. (The province’s rental housing site has helpful information for landlords and tenants.)
Residential leasehold properties are NOT the same as leasehold stratas and they are not governed by the Strata Property Act. Strata legislation does not apply to long term residential leases; it only applies to strata lots or leasehold strata lots. Under strata legislation, strata leasehold owners must vote to approve annual budgets, strata fees, special levies and repairs, and elect a strata council. (The province's strata housing website has helpful information for strata owners, residents and council members).
The requirements, rights and responsibilities set out by strata legislation do not apply to long term residential leaseholds.
- Through a lease agreement, an initial leaseholder purchases the right to occupy a unit for a fixed length of time (usually 99 years). This is sometimes referred to as prepaying the lease.
- The lease agreement is a legal contract with obligations for both the lessee (leaseholder) and the lessor (leasehold landlord).
- In most cases, the lease contract has been drawn up by the leasehold landlord and is non-negotiable. Leasehold contracts are registered with the Land Title Office by leaseholders or their representatives at the time of purchase.
- The leaseholders must pay monthly fees, which are set by the landlord and which can include:
- Building administration and maintenance services
- Water and sewer
- Garbage pickup and recycling
- Utilities such as natural gas
- Electricity for the common building areas as well as their units
- Property taxes
- Building insurance
- Most contracts stipulate that replacements and repairs are to be paid for through regular monthly fees or extra assessments that the leasehold landlord can require the leaseholder to pay. However, the lease contract usually does not cover enhancements to the property that the leasehold landlord may choose to undertake.
- Leaseholders in non-strata residential lease properties do not usually have the right to vote on decisions concerning the building or the fees they pay.
- Sometimes there are disputes between the leasehold landlord and the leaseholders about repair and maintenance costs. Leasehold landlords may provide annual audit reports to each leaseholder. However, most contracts do not stipulate that leaseholders be given specific details or access to invoices and receipts for items in the report for which maintenance fees or extra assessments have been spent. Nevertheless, this information may be required should a dispute go to court. This is very different from strata leaseholds, which are governed by the Strata Property Act.
- Long-term leases in B.C. are subject to the principles of contract law and common law. Contract terms can vary widely from one building to another.
- Disputes between leaseholders and leasehold landlords that cannot be resolved by negotiation are resolved through the courts. The provincial government has no role in resolving these disputes.
Long term leaseholders may be eligible to benefit from the provincial Home Owner Grant if the registered lease has a term of at least 99 years, and requires the leaseholder to pay the property taxes for the property. The grant is claimed by the lessor (landlord) and must be passed on to the lessees (leaseholders).
Long term leaseholders may be exempt from paying the Property Transfer Tax if the lease provides the right to occupy the property for a term of 30 years or less from the date of registration at the Land Title Office. For more information, please contact the Property Transfer Tax Administration Office at 250-387-0604.
The information on this website about residential leasehold properties is provided for the user’s convenience as a basic starting point; it is not a substitute for getting legal advice. The content on this website is periodically reviewed and updated by the Province of British Columbia as per the date noted on each page: January 2016.