Municipal Regulation of Short-term Rentals

The City of Toronto is taking steps to regulate short-term rentals.  Other municipalities may not be far behind.

Short-term rentals are a growing concern in many residential communities, including residential condominiums.

The City of Toronto is proposing new regulations to control short-term rentals.  Among other things, the new regulations would

  • introduce a new land use called “short term rental”;
  • permit short-term rentals only in a host’s primary residence;
  • require licensing of companies (like Airbnb) that facilitate short-term rentals, with related licensing fees;
  • require registration of short-term rental hosts and premises, with related registration fees;
  • impose specific safety requirements for short-term rentals;
  • perhaps also introduce new taxes on short-term rentals.

It stands to reason that other municipalities may follow suit.

However, these new municipal regulations don’t change the separate rights of condominium corporations – including rights to enforce existing provisions in the corporations’ declarations or rules (prohibiting or controlling short-term rentals in the condominium) or rights to amend their declarations or pass new rules (again, prohibiting or controlling short-term rentals in the condominium).

In other words:   Although municipalities may be taking steps to regulate short-term rentals, condominium corporations will still have their own separate rights to regulate or prohibit short-term rentals in their specific communities.  Condominium corporations concerned about short-term rentals should review existing provisions in their declarations and/or rules, and may wish to consider declaration amendments and/or new rules, to regulate or prohibit short-term rentals in their condominiums.

Stay tuned to Condo Law News for more blogs about amendments to the Condominium Act and upcoming events .

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Christy Allen discusses Airbnb and Condos -Saturday morning on 580 CFRA

Listen to Christy Allen of Davidson Houle Allen speak about Airbnb and condominiums, on the June 17, 2017 Podcast on The Newsfeed with Kristy Cameron on 580 CFRA!

Find Christy’s appearance on ‘Hour 2’ of the Newsfeed on June 17, 2017 (starting at minute 22:43)

http://www.iheartradio.ca/580-cfra/shows/the-newsfeed-with-kristy-cameron-1.1818974

Christy talks with Kristy Cameron about the increasing presence of condominium units listed on Airbnb, particularly in anticipation of Canada Day and the market for accommodations in Ottawa.

Christy explains how condominium units being rented for nightly/short term rentals are a growing problem for condominiums, and such rentals may be in breach of a Condominium Corporation’s rules.

She discusses condominiums’ enforcement rights to deal with an owner or tenant renting for short term/nightly rental on websites like Airbnb, and why short-term rentals are significant concerns for Condominium Corporations, related to security, safety, community, responsibility for common elements, and use of amenities.

Christy also discusses why the recent steps to regulate Airbnb rentals in Toronto are relevant for Ottawa, and whether such steps may be useful here.

Stay tuned to Condo Law News for more blogs about caselaw updates related to condominiums.

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Recent Decision Addresses Short-term Rentals

A recent Ottawa court decision provides helpful confirmation of the existing law respecting the rights of condominium corporations to prevent short-term tenancies.

In the case of Ottawa-Carleton Standard Condominium Corporation No. 961 v. Menzies – which we will cite as OCSCC 961 – the Court held that an owner’s short-term rentals, arranged through “numerous websites such as Airbnb”, violate the corporation’s Declaration and Rules.

The corporation’s Declaration states that the units can be used only as single family dwellings. The Court said:

“Single family use” cannot be interpreted to include one’s operation of a hotel-like business, with units being offered to complete strangers on the internet, on a repeated basis, for durations as short as a single night. Single family use is incompatible with the concepts of “check in” and “check out” times, “cancellation policies”, “security deposits”, “cleaning fees”, instructions on what to do with dirty towels/sheets and it does not operate on credit card payments.

 Moreover “Single family use” could not have contemplated including the use of a unit to house out-of-town witnesses and experts for trial preparation or the unit being offered on silent auctions for not-for-profit organizations or to hold a law firm’s office functions and Christmas parties. What has happened in this case is a commercial use of the unit.

 The corporation also passed a Rule placing a four-month minimum on the duration of tenancies. The Court said that “rules requiring that leases be in excess of 4 months have been found to be valid and enforceable.

So, in summary, this is another helpful decision that serves to reinforce previous cases upholding similar provisions in condominium Declarations and Rules.

Another note that I hasten to add is as follows: the courts have previously upheld Rules prohibiting short-term tenancies even in cases where the Declaration doesn’t contain any “single family” provision, but rather says that the units can only be used for “residential purposes”. In my view, some of the reasoning in the OCSCC 961 decision (for instance, the reference to “commercial use”) might also be helpful in those situations. Anyway, my point is that even if your Declaration doesn’t include a “single family” provision, you might still be able to pass and enforce a Rule against short-term tenancies. This is something that may depend upon the specific wording of the Declaration in each case.

The OCSCC 961 decision also contains some other interesting findings. For instance:

  • The Court said: “In the absence of a definition in the condominium documents of what constitutes a ‘single family’, the courts have defined a ‘family’ as a ‘social unit consisting of parent(s) and their children, whether natural or adopted, and includes other relatives if living with the primary group. So this is another reminder that condominium corporations with “single family” provisions in their Declarations should consider establishing a definition of family, perhaps by Rule. Otherwise, the above definition from the courts – which is an extremely narrow definition – may apply!

 

  • The Court also confirmed, as has been held in previous cases, that mandatory mediation and arbitration (under Section 132 of the Condominium Act, 1998) does not apply when the dispute involves any parties other than the condominium corporation and the owner. In this case, the owner had incorporated a company to manage and lease the unit; and the Court held that this company was a necessary party to the dispute. The Court also held that the owner had waived any rights to mandatory mediation and arbitration because the owner’s management company had commenced a Court Application (respecting essentially the same issues) against the condominium corporation – even though that Application had since been abandoned.

 

This is yet another strong decision in support of condominium corporations looking to prohibit short-term tenancies.

For more information about short term tenancies in condominiums, please get in touch with us.

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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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