Airbnb: Does Your Condo Have a Rule Prohibiting Short-term Leasing?

The controversy continues over hotel-like nightly rentals of residential condominium units through the Airbnb website. This may be the hottest topic in condominium law right now (in addition to the revised Condominium Act, of course)! Every week there appears to be different news stories about Airbnb and the condominiums that reject (or embrace) this type of rental for residential units.

Most recently, an interesting article on the CBC website discusses the ongoing battle between condo owners who want to continue renting their units on Airbnb, and those that want the government to legislate a ban on short-term rentals.

In fact, as many have done, a condominium corporation can restrict short-term rentals by establishing a minimum leasing term for a unit. This is established through a rule or provision in the declaration. The condominium has to then enforce that rule against the owner who is using Airbnb to rent out their unit on a transient basis. We have assisted many condominiums through this challenging issue.

So the question is: are Airbnb rentals permitted at your condominium, or do you have a rule prohibiting short-term leasing?

As Airbnb becomes more and more prevalent, and arguably an increasing problem for buildings that prohibit short-term leasing, it is important for potential purchasers to clearly understand whether the condominium they are considering allows short-term rentals of units.

Each condominium is different. Many condominium owners will have an opinion on this issue one way or another. Airbnb in a condominium will affect a condo owner’s home, investment, and use of their unit. If Airbnb is not already an issue, its presence (lawfully or not) may be coming to your condominium in the near future.

If you have a question about Airbnb rentals in your condominium, contact our Condominium Law group today.

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Realty Assessments – Should You Consider an Appeal?

Condominium common elements are generally exempt from realty assessment and taxation, subject to certain exceptions noted in Section 15 of the Condominium Act, 1998. But condominium corporations can also own land. For instance, condominium corporations may own one or more:

  1. Units in the condominium
  2. Parcels of land containing amenities or containing facilities shared with other properties
  3. Parcels of land for other reasons.

If so, you may have recently received the 2016 Assessment Notice from MPAC (the Municipal Property Assessment Corporation) in relation to those lands owned by the corporation.

If you’ve received an Assessment Notice, this raises the following question: Should you appeal?

Note that the “Request for Reconsideration” deadline, which is the first step in the appeal process, is 120 days from the date of the Property Assessment Notice (the deadline is printed on the Notice). Thereafter, MPAC will send a letter with its decision. If you disagree with MPAC’s decision, an appeal to the Assessment Review Board can be commenced within 90 days. Of course, an appeal makes sense any time a property has been “over assessed”, in that it has been assessed at a market value that is unfair in comparison with other similar properties in the vicinity. But there’s another reason for condominium corporations to consider an appeal: some properties owned by condominium corporations should be assessed at nominal value.

A number of recent decisions of the Assessment Review Board (ARB) have confirmed that property owned by a condominium corporation should in many cases be treated as having nominal value (for purposes of realty assessment and taxation) if the value of that property is already included in the assessed values of all of the units in the condominium.

A recent example was the 2013 case of Toronto Standard Condominium Corporation No. 1498 v. Municipal Property Assessment Corporation. In that case, the ARB held that superintendent units owned by condominium corporations should often be treated as having nominal or negligible value (for realty tax purposes) – resulting in realty taxes close to zero on those units.

The reason was as follows: all other units in the condominiums were assessed and taxed based upon the presence of on-site superintendents in the condominiums. So, the value of the superintendent units had already been included in the value of all other units. Or, in other words, a superintendent unit is in many cases “akin to common elements” for purposes of realty assessment and taxation.

These same principles can apply to many other types of land owned by condominium corporations – not just superintendent units. In recent years, we’ve handled a number of assessment appeals on behalf of our condominium clients, with excellent results.

The bottom line is as follows: any condominium corporation that owns land and has received a 2016 Assessment Notice showing a higher-then-nominal value for that land should consider the following question: “Should I appeal?”

If you have questions about your Assessment Notice and whether you should appeal, contact our Condominium Law group today.

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New Date for the ACMO CCI-KINGSTON 3rd Annual Conference

Nelligan O’Brien Payne is proud to be the Diamond Sponsor of the 3rd Annual ACMO CCI-Kingston Condominium Conference at the Ambassador Hotel & Conference Centre.

After being postponed, the event is now confirmed for November 25, 2016.

Morning presentations will include:

  • Helpful Tips for Condominium Corporations
  • The Engineering Panel
  • Let’s share ideas: Condo Triumphs and Regrets

The afternoon will include:

  • A presentation on the Accessibility for Ontarians with Disabilities Act
  • The Legal Panel
  • Closing remarks

The day also includes a luncheon and three breaks with Exhibitors, who are ready to speak with attendees about condominium issues!

For more information and to register for the conference, visit the CCI site here.

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