Can I buy a restaurant with an apartment upstairs and live there?

A listing that mentions an apartment above the restaurant can be a real attraction. Home and work in one building is convenient. It is also easy to assume the apartment comes with the business when it may not. The unit can be tied to the restaurant lease, rented separately, or used by the current owner under an informal arrangement. Each possibility changes what you are buying.

Find out how the apartment is held

Ask the seller for the lease and any separate agreement covering the unit. Check whether the apartment is named in the lease, whether it is a second tenancy with its own terms, or whether the seller simply lives there with the landlord’s tolerance. Ask your lawyer whether an informal arrangement would transfer to a buyer. Your lawyer can tell you what you would actually receive at closing.

Confirm who has to agree

The lease may require the landlord’s consent to an assignment (check the clause), and may have views on someone living in the unit. Your lender may also care about how the space is used, since it is lending against a business. Raise the living arrangement early, in writing, so that nobody is surprised during due diligence. Our guide to buying a restaurant in Canada covers the wider process.

Think about living above your kitchen

Noise, cooking smells, deliveries and late closing times do not stop at the staircase. Some owners find the short commute valuable, and others find it hard to ever be off duty. Spend an evening in the unit during service before you decide. Ask your insurance adviser how a residence above a commercial kitchen is covered.

• Is the apartment named in the restaurant lease or in a separate one?
• Does the landlord consent in writing to you living there?
• Does your lender accept the arrangement?
• Is the residential use permitted for the building? Your lawyer can check.