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residential use

Tuesday May 19 2026

Residential use: operation of a business in your condo

Many co-owners and tenants may be tempted to conduct commercial activities in their private residential units, whether to reduce their tax burden—particularly commercial taxes—or to lower certain costs associated with running a business, such as rent, electricity rates, water bills, or other commercial expenses.

Before using your condo—or one you rent—to conduct a commercial activity, we strongly urge you to consult your building’s declaration of co-ownership.

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The building’s intended use

It’s a safe bet that, in the section regarding the building’s intended use, you’ll find a passage similar to this:

“The building is intended exclusively for residential use.”

Unless your building is mixed-use, commercial units are generally specified in detail. Thus, a residential unit cannot normally be used for commercial purposes without authorization.

Even when an activity appears low-key or small-scale, it may still be considered commercial if it involves, for example, receiving clients, frequent visits, regular deliveries, or unusual foot traffic in the building.

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The condominium syndicate’s obligation to its insurer

The condominium syndicate is obligated to report any commercial activities taking place in the building to its insurer. This obligation is important because certain activities increase the risks associated with the building and can have a direct impact on insurance coverage.

In the event of a claim, the syndicate’s insurer as well as that of the at-fault co-owner—i.e., the business operator—could refuse to compensate the syndicate or the insured if the commercial activity was not declared or if it violates the building’s designated use. The financial consequences can then be significant, both for the co-owner concerned and for all occupants of the building.

In addition, the syndicate could also report certain commercial activities to the city or to Revenu Québec when they violate applicable regulations or tax obligations.

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Examples of commercial activities observed in condominiums

Among the commercial activities frequently observed in residential units are:

Daycare;
Massage studio;
Tattoo studio;
Airbnb-style tourist accommodation;
Commercial kitchen or food service activities;
Building management office set up in a private residential unit.

More serious situations may also arise, such as sexual exploitation or the sale of narcotics. If you have any doubts regarding such activities, it is recommended that you contact law enforcement so that an investigation can be conducted.

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Tips for landlords

For owners renting out their condos, certain precautions can be taken to ensure the tenant does not operate a business within the unit.

When signing the lease, it is important to ensure that the person to whom you are renting the condo is the one signing the lease and who will actually occupy the premises.

The landlord should also ensure that the tenant agrees to comply with the building’s intended use as well as the applicable condominium regulations. A copy of the regulations should be provided to the tenant at the start of the lease.

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Obligations of the landlord and tenant

The Code civil du Québec (C.c.Q) clearly sets out certain obligations regarding the use of the rented dwelling.

Article 1856 C.c.Q.

“Neither the landlord nor the tenant may, during the term of the lease, change the form or intended use of the leased property.”

This provision confirms that a unit intended for residential use cannot be freely converted into commercial space without complying with the rules set forth in the declaration of co-ownership and applicable regulations.

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Conclusion

Compliance with the building’s designated use is essential to ensure the safety, peace, and protection of the rights of all co-owners and occupants. Before engaging in a commercial activity in a condo, it is strongly recommended to consult the declaration of co-ownership, verify applicable municipal by-laws, and assess potential impacts with the relevant insurers.

An unauthorized commercial activity can have significant consequences, both legally and financially, for both the co-owner at fault and the entire condominium.

Robert Barrette
Director – Property Management