Strata Alert: Strata corporations should be wary of involvement in strata hotel rental pool operations

Strata corporations should be wary of involvement in strata hotel rental pool operations

Amanda M. Magee, Associate
Phone:  604-685-5438


The Civil Resolution Tribunal’s decision in Jedmen Holdings Inc. v. The Owners, Strata Plan NES3120 is a cautionary tale for strata hotels that may find themselves in hot water over their level of involvement with rental pool operations.

Strata Plan NES3120 was developed and marketed as a “strata hotel”. The strata had an optional rental pool that was managed by a rental manager and governed by a rental management agreement between the strata and the rental manager. Each of the owners who participated in the rental pool also had a separate agreement between themselves and the rental manager. The strata had a single commercial unit that it leased to the rental manager as part of the operation of the rental pool.

While only roughly half of the strata’s owners participated in the rental pool, there were certain aspects of the rental pool arrangement that affected all of the owners. For example, the strata passed bylaw amendments to restrict the ability of owners to rent their strata lots except through the rental pool. The strata council also created a committee to deal with issues arising from the rental pool.

An owner brought a CRT dispute against the strata, arguing that it was not right for the strata to be a party to the rental management agreement, or to be involved in the governance of the rental pool via strata council committee, when not all of the strata’s owners were participating in the pool. The CRT agreed and found that by being a party to the rental management agreement, and by having a strata council committee involved in the management of the rental pool, the strata was not able to act in the interests of all owners equally because the interests of the rental pool owners and the non-participating owners would sometimes compete.

On that basis, the CRT ordered the strata to stop any involvement in the management of the rental pool, to dissolve the council committee that dealt with rental pool issues, and prohibited the strata from entering into any further agreement with the rental manager in respect of the rental pool.

The CRT held that the strata’s existing rental agreement with the rental manager was unenforceable because it was in contravention of the Strata Property Act. Strata corporations can only restrict rentals in one of the ways expressly permitted under s.141 of the Act: by restricting the number or percentage of rentals, or the period of time for which units may be rented. The Act does not permit a strata to restrict rentals outside of a rental pool.

In this case the strata could continue to lease the commercial unit to the rental manager, and individual owners could still contract with the rental manager to join the rental pool, but the strata could not prevent owners from renting outside of the pool.

The strata applied to the BC Supreme Court for leave to appeal the CRT’s decision but the application was dismissed (section 56.5 of the Civil Resolution Tribunal Act, which is now repealed, only provided for appeals of CRT decisions in very specific circumstances, which the Court found did not apply in this case).

The CRT’s decision in Jedmen has serious implications for strata hotels and other strata corporations whose owners are involved in rental pool arrangements. The strata may still enter into a lease agreement with the rental manager, and other agreements for services like garbage collection and cleaning, but it must not enter into a rental management agreement or any other type of agreement with respect to the rental pool itself.  The strata should also not get involved in any enforcement or decision-making relating to the rental pool.

The rental pool arrangement is ultimately between the rental manager and the individual owners who contract with the rental manager and agree to participate in the rental pool. The council should be careful to act impartially with respect to the interests of owners who participate in the pool and those who do not.  Strata hotels should also carefully review their rental bylaws to ensure that they are enforceable in light of the Jedmen decision.

It is worth noting that the CRT’s decision in Jedmen did not specifically address whether the strata would be able to restrict or prohibit licenses of a strata lot outside of a rental pool (e.g. Airbnb, VRBO and other hotel-like uses), which are not governed by s. 141 of the Strata Property Act. For more information on the difference between rentals and licenses, please see our previous articles here and here.

WHAT WE DO: Lesperance Mendes has advised strata corporations on strata governance issues since 1997. If your strata corporation has governance questions relating to rental pool operations or requires assistance with drafting enforceable bylaws, please contact Amanda M. Magee, Associate, at 604-685-5438 or by email at

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

Lesperance Mendes Lawyers
900 Howe St #550, Vancouver, BC V6Z 2M4
(604) 685-3567