Canada's Condominium Magazine
The recent case of a Toronto condominium community that fought to win back control of its board in order to enforce the corporation’s rules against short-term rentals provides a good example of why it is important for condo owners to keep themselves informed about their community’s rules and by-laws. The old adage that just because you haven’t heard about a problem doesn’t mean there isn’t one seems to apply with particular force in the condo-as-short-term-rental category. As when a woman who had rented her condo to a (she thought) legitimate lease-holding tenant found out to her shock that said tenant was actually running her condo as a hotel business, renting it out by the night. With Airbnb growing ever more popular in cities like Toronto, condo owners owe it to themselves to keep on their toes, or lose control of their own communities.
According to recent reports in the media, condo board directors at a certain downtown Toronto condo were voted off the board when they tried to enforce the building’s ban on short-term rentals, replaced by pro-renter members. Reports followed of rowdy renters disturbing residents, throwing loud parties and throwing trash in the patio. Two short-term rental companies were involved, though both deny doing anything wrong. According to one, which has been operating in the building for more than five years, they had provided their leasing agreements to management long before things blew up. The agreements clearly state that short-term rentals are what they offer.
As reported by CBC news, some of the building’s residents believe that condo boards, which consist entirely of volunteers, can’t fight back against rental companies even if rules against short-term rentals are in place. Once the rental companies gain control, it is said, condo boards would have to spend a lot of money to fight them. But is this true?
One condominium lawyer says that condo corporations have “many tools” to prevent short-term leasing, the first of which is the condo declaration. If there is language in the declaration that specifically limits the use of units to private single families or residential purposes, or that expressly bans rooming, boarding and transient “hotel-like” occupancy, then that language ought to be enough to deal with unwanted rentals through “normal compliance” measures. If not, it will stand up in court.
If, on the other hand, the condo declaration does not contain this kind of anti-short-term rental language, the declaration will have to be amended. This can be a challenge, as a very high level of owner approval is required.
A simpler option is for the condo corporation to adopt rules to prevent short-term leasing. According to the Condominium Act, corporations can enact rules to promote the safety, security or welfare of owners, and to prevent unreasonable interference with the owners’ use and enjoyment of the common elements and units. A rule could be adopted, for example, to prevent leases of less than three months, though the lawyer cautions that the language must be carefully chosen, and the rules “reasonable.”
A third option for a disgruntled owner is to find out whether short-term rentals in her building violate any municipal by-laws. It could be that commercial use of a condo, such as provided by Airbnb, is against the local zoning laws, even though Airbnb is legal in Canada. If that proves to be the case, a detailed letter to the appropriate city department could get results more quickly than other approaches.
In the end, it is an issue of enforcement and compliance. According to lawyer Rodrigue Escayola, most short-term landlords are non-compliant from the get-go simply because they do not inform the corporation, as required under the Condominium Act, every time they enter into, renew or terminate a lease of the unit. They are also required to provide the corporation with the renter’s name and a copy of the lease, while the renter is supposed to be provided with a copy of the declaration, by-laws and rules of the corporation. Clearly, this isn’t being done.
On the assumption that it’s usually easier to prevent a problem than to remedy it after it has occurred, the best advice for condo owners is still to keep themselves informed. Know the rules and by-laws, and brush up on the condo declaration. Both boards and owners will simply need to be more vigilant if they want to avoid short-term rental problems.
As reported in Metro News a week ago, approximately 16 per cent of Toronto’s Airbnb listings are on the waterfront, most of those being for the entire unit. It’s difficult to imagine that owner-residents of these buildings are unaware of that high volume of business going on in their buildings. It could be, as Airbnb has said, that the “vast majority” of their hosts are “regular people” just sharing their home for a few nights each month, and that no problems have yet arisen. Owners should know, however, that they don’t have to put up with it if they don’t want to.