Article by Alan Rankine

Cheap, short-term rental accommodations through companies like Airbnb Inc. are popular for travelers and condominium owners, however they are not as appealing for condo corporations when they occur in their condo complexes. Short-term renters have less reason to be invested in the security, safety and comfort of the occupants residing in the complex or in the security of the property itself (see the CBC article “Airbnb Nightmare Renters Leave Calgary Home Trashed“).

Although Airbnb and similar short-term rental organizations are currently legal in all provinces, their future may be quite different. Quebec is looking to regulate and tax this business, as are several cities in the USA. The remainder of the Canadian provinces will likely follow.

Should this type of business become regulated, hosts may be required to obtain various permits or meet certain standards under local laws or bylaws. Condo corporations should carefully consider whether or not this will put them in breach of these laws, should the host fail to abide by all applicable laws.

The Downside for Condo Companies

In Alberta, the Condominium Property Act and the Court of Queen’s Bench do not support any bylaw, regulation, policy or rule which attempts to curtail, prevent or restrict a unit owner’s ability to lease their unit. Reconsideration of the court’s decision has been allowed. Should an appeal of this decision be successful, condo corporations may be permitted to curtail the leasing rights of unit owners.

What Condo Companies Can Do

Alberta courts have upheld bylaws which restrict a unit owner’s use of their unit or the common areas in the complex or both, such as bylaws which restrict the unit owner’s use of the unit to a “single family dwelling”. Although it is not uncommon for an owner to share their condo with friends, the Alberta Court of Queen’s Bench held that there is a difference between an owner allowing a few friends to stay in the unit as opposed to using the unit as a resort club, with a number of different families on a rotational basis.

Condo corporation bylaws may also disallow an owner from using their unit or the common area for a commercial venture. If the unit owner is advertising their unit online and frequently renting off Airbnb or like businesses, this activity may be classified as a commercial activity. The ABQB has held that resort clubs, hotel-like activity and timeshare-like activity in either the unit or common areas or both are, in essence, a commercial venture and will breach such a bylaw.

Condo corporations should enforce strict compliance with the bylaws by including a separate bylaw which requires strict compliance with all bylaws and prohibits waiver of bylaws by the condo corporation to ensure these bylaws will be upheld. Language in such bylaws and rules should be considered carefully and include the specific activities which will be prohibited.

Airbnb and similar companies are recent developments which have not yet been regulated in any provinces. Condo corporations who wish to keep this type of renting activity out of their complex may want to consider re-writing their bylaws, regulations, rules, or policies in a manner which effectively stops this activity.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Source: Mondaq

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