Condo Industry Update: Short-term Rentals

At recent AGMs for many of our condo corporation clients, a hot topic of debate has been issues surrounding short-term rentals of individual condo units (i.e. AirBnB).

Issue: short-term unit rentals

Individual condo unit owners believed that the condo board and declaration have no right to determine who or what type of tenants would occupy their unit. However, in last week’s decision on Ottawa-Carleton Condo Corp 961 v. Menzies, the Ontario Superior Court ruled that the condominium has the right and power to enforce the declaration.

Decision: Condominium Act, 1998 gives the condo declaration all the power

The Ontario Superior Court confirmed that the condo declaration has the right to establish conditions or restrictions regarding the occupation and use of individual units. Furthermore, the condominium has the right to make, amend or repeal rules pertaining to units, to promote the safety, security, enjoyment or welfare of the owners. This includes the power to enforce restrictions on the leasing of individual units.

The ruling also severely weakened any grandfathering of owners’ rights prior to the adoption of any revision to the condominium declaration (i.e. to forbid short-term rentals).

Going-forward: ask the right questions

Condominium board of directors should speak to their legal representatives to understand how Ottawa-Carleton Condo Corp 961 v. Menzies may impact their condominium corporation (i.e. in terms of the condo declaration, insurance policies, leasing rules, municipal by-laws, Condominium Act etc.).

For more information regarding the case, refer to the link below:

http://business.financialpost.com/legal-post/ontario-court-ruling-says-condo-buildings-can-ban-sharing-services-such-as-airbnb