Strata Alert: BC Supreme Court upholds ban on short term rentals

Strata Alert: BC Supreme Court upholds ban on short term rentals
HighStreet Accommodations Ltd. v. The Owners, Strata Plan BCS2478, 2017 BCSC 1039

Paul G. Mendes, partner
Phone: 604-685-4894
Email: pgm@lmlaw.ca

The BC Supreme Court dealt a blow to the short term accommodation industry in BC last month when it upheld a strata’s right to pass bylaws banning such services.

The plaintiff in this case (HighStreet) is in the business of leasing properties from residential strata lot owners and renting them out as furnished accommodation to its clients, who were described in HighStreet’s paperwork as “licensees”, probably as a result of the BC Provincial Court decision in The Owners Strata Plan VR2213 v. Duncan & Owen, 2010 BCPC 123.

In 2012, the strata passed a bylaw prohibiting owners and tenants from allowing a unit to be occupied under “…a lease, sublease, contract, license or any other commercial arrangement for periods of less than 180 days”. HighStreet challenged the bylaw under s. 143(1)(a) of the Strata Property Act (the “SPA”) which “grandfathers” existing tenancies from new rental restrictions. HighStreet argued that it should be grandfathered from the new bylaw because it was a tenant when the strata passed the bylaw.

The Court rejected HighStreet’s argument and concluded that s. 143(1)(a) only applied to tenancies and not licenses. In other words, HighStreet’s tenancy may have been grandfathered, but HighStreet’s business model was not. The Court found that there was nothing in s. 143(1)(a) that extended protection to HighStreet’s operations or its clients.

This decision will be welcomed by residential strata’s trying to restrict short term rentals through their rental restriction bylaws. This important case also puts to rest any lingering concerns about whether the grandfathering provisions of the SPA apply to short term use restrictions.

Owners and strata councils can expect this issue to heat up in the coming years as local and provincial governments struggle to find solutions to BC’s housing affordability crisis. If I were a betting person, however, I would put my money on legislative reform that will make rentals of all kinds easier and not harder.

WHAT WE DO: Lesperance Mendes has been advising strata corporations and strata owners on bylaw enforcement matters since 1997. To find out how we can assist you or your strata to develop best practices for enforceable bylaws, contact Paul G. Mendes, partner at 604-685-4894 or by email at pgm@lmlaw.ca

THIS ARTICLE IS NOT LEGAL ADVICE: This article provides general information and should not be relied on without independent legal advice.