Vancouver landlords fined $57,100 for turning offices into 11 illegal rental rooms

The decision, dated July 10, 2026, is a reminder that a bargain rent doesn’t always mean a safe or legal tenancy, and that regulators are willing to use their maximum enforcement powers once they catch up with landlords who skip the paperwork.

What the RTB found inside the illegal rental units

According to the CEU decision, the building was approved for retail use on the ground floor and office use on the upper floors; at no time did these approvals include the creation and use of units for residential tenants. The CEU investigation found that sometime between June 25 and July 16, 2025, the numbered company and its directors converted the second and third floors into partitioned rooms and began renting them out as 11 separate units.

City of Vancouver inspectors flagged the building’s “configuration and use” in mid-2025, and Vancouver Fire Rescue Services (VFRS) also found serious deficiencies, including a non-functioning fire alarm and sprinkler system, no fire department connection or standpipe, and blocked exit routes, in a separate investigation.

As a result, the city issued ‘not safe to occupy’ orders on August 18, October 9 and November 20, 2025. While, the VFRS issued a ‘do not occupy’ and fire watch order on November 18, 2025.

Despite these rulings, tenants kept living in the building. On November 28, 2025, the CEU began its own investigation, at the city’s request, and found occupancy continued in spite of the city and VFRS orders and until April 13, 2026 (and potentially longer).

How BC fines illegal conversions

BC’s Residential Tenancy Act allows administrative monetary penalties of up to $5,000 per contravention — and the CEU opted to treat each of the 11 rented rooms as a separate contravention. The CEU scoring also ended up calculating the penalty for each contravention above the capped $5,000 per unit — but the statutory maximum was upheld, resulting in a total penalty of $55,000. An additional $2,100 penalty was added for a separate, building-wide violation, as the landlord never obtained permits to fix unauthorized electrical alterations, despite a City deadline of December 9, 2025.

The total administrative penalty is $57,100, which is due on September 14, 2026. If the company and its directors keep breaking the rules — such as allowing residential tenants to occupy illegal units — the RTB can add penalties to this initial ruling, up to $5,000 per contravention per day.

Landlords respond to the order and the fines

Nawaz, Khan and the company argued they shouldn’t be fined at all, saying they were cooperating with regulators and had hired structural, fire-code and electrical consultants to fix the problems while trying to avoid displacing existing tenants.

The CEU Director rejected that argument, writing that the safety and occupancy problems “were not unforeseen events that emerged after tenants had been housed” but resulted from the decision to convert and rent out the space before getting any approvals in the first place.

Red flags renters should watch for

Illegal conversions aren’t always obvious from a listing photo or a quick viewing. A few checks before signing a lease can save a lot of grief and a potential loss of funds. To help, here are four steps to take to protect yourself:

1. Ask to see the building’s occupancy permit or business licence before signing a lease.
2. Check for a working fire alarm, sprinkler system and clearly marked exits when viewing a unit.
3. Be wary of partitioned “rooms” inside what looks like an office or commercial building.
4. Report a suspected illegal conversion to your province or territory’s rental tribunal Compliance and Enforcement Unit or to your city’s building department.

Remember that it’s possible to find a legitimate below-market rental, but to protect yourself and your finances, you need to do your own compliance checks.