Strata Alert: Regulating Short Term Rentals in your Strata Corporation

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Regulating Short Term Rentals in your Strata Corporation

By Alex Chang and Paul G. Mendes

 

There has been an exponential increase in the short-term rental or home-sharing economy through websites like AirBnB. Depending on your location within the province, you can probably find hundreds of short term rental suites available in your area right now.

Unfortunately, there is limited regulation or enforcement of laws related to short-term rentals. This means that limitations on short-term rentals are generally dealt with on an ad hoc basis in the bylaws of individual strata corporations. Such bylaws must balance the needs of strata corporation and their owners.

Short-term renting clearly presents economic and personal advantages for hosts, such as the flexibility to take advantage of underused property and the opportunity to charge more rent. Some landlords renting strata lots are even choosing to rent short-term as a more profitable alternative to traditional renting. There have even been concerns expressed in Vancouver that the pool of traditional long term rental properties may be shrinking as a result of the AirBnB phenomenon. Some users also enjoy using services like AirBnB as a means of connecting with travellers from around the world.

But short term rentals can also be a real nuisance for neighbours. Do a “google search” of the words “AirBnB & nightmare & New Year’s Eve” and you will see what we mean.

Neighbours may disapprove of the use of their building as a de facto hotel because of security concerns and the potential loss of community that may come with more transient residents. Indeed, there is no obvious advantage to allowing short-term rentals from the strata corporation’s perspective. While individual owners may benefit from renting out their strata lots on a nightly basis, it is the strata corporation that bears the risk of allowing transient renters into the building.

Unfortunately, the challenges that short-term rentals present are not specifically addressed in the Strata Property Act. The case of The Owners Strata Plan VR2213 v. Duncan & Owen, 2010 BCPC 123, confirmed that short-term rentals are legally distinct from more traditional rentals. Thus, the Strata Property Act provisions that deal with rentals and rental restrictions do not apply to short-term rentals. Even s. 146 the Strata Property Act, which requires owners and tenants to certify that the tenants have received the strata corporation’s bylaws, does not apply in the short-term rental context.

Municipalities may have bylaws that regulate or restrict short-term rentals but the enforcement of these bylaws appears to be spotty at best.

In the absence of government regulation or enforcement, strata corporations should give consideration to addressing short-term rentals in their bylaws. Since the Strata Property Act and the standard bylaws do not specifically address short-term rentals, such bylaws must be drafted from scratch. Is not as simple as stating that “all rentals must be for a minimum of 12 months”.

Bylaws prohibiting short-term rentals must be passed by a ¾ vote resolution at an annual or special general meeting. Owners in different strata corporations may have different views on what regulation if any is appropriate. Thus, consideration should be given by strata councils to the views of owners so that any proposed bylaws can pass by ¾ vote.

Individual owners and strata lot buyers should also review their bylaws very carefully for any restrictions that may already exist before engaging in short-term renting. Strata corporations that have bylaws in place have a variety of enforcement options including fines and court action against owners that breach the bylaws.

As always, legal advice should be sought when reviewing, drafting or enforcing short-term rental bylaws.

WHAT WE DO: Lesperance Mendes advises strata corporations and strata managers on all aspects of bylaw amendments and enforcement. To speak to one of our strata lawyers, contact Paul G. Mendes at pgm@lmlaw.ca or Alex Chang at ajc@lmlaw.ca.