Condos and Short-term Rentals

Short-term rentals have gained in popularity over the past several years, and many owners have begun offering their condo units for short-term rentals either on their own or through short-term rental companies such as Airbnb, Expedia, etc. Short-term rentals can sometimes lead to disruptions and other issues in condo communities as the short-term rental occupants may not follow the condo rules, not be compliant with municipal by-laws, or not be compliant with other legislation.

Examples of short-term rental common issues include:

  • There is a security concern among other owners/ occupants as additional keys or access to the condo building is being given to many new people.
  • Additional wear and tear to the common elements or use of the condo’s amenities due to increased usage.
  • A unit’s short-term occupants and their guests are consistently disrupting the condo (e.g., loud music or litter) or not complying with the condo’s governing documents.
  • An owner or occupant continues to use their condo for short-term rentals despite a restriction in the condo’s declaration or rules against it.
  • An owner or occupant was originally told they could use their unit as a short-term rentals, but the condo board has since changed the rule.

Most condo boards and the owners are concerned about short-term rentals. In response, many condos have provisions in their declaration, by-laws, and rules (collectively called the “governing documents”) prohibiting or placing conditions upon short-term rentals. These provisions would most likely be found in the corporation’s declaration or rules, though they may also be found in the by-laws.

A condo’s declaration can contain requirements for residing in a condo, which may include a complete prohibition on rentals or perhaps only on short-term rentals.

With regard to rules, under section 58 of the Condominium Act, 1998 (the “Condo Act”), condo corporations can adopt rules to:

  • Promote the safety, security or welfare of the owners and of the property;
  • Prevent unreasonable interference with the use and enjoyment of the units or common elements of the corporation.

Accordingly, condo corporations will often have rules that place conditions upon owners who want to rent out their units (e.g., a requirement that all unit rentals must be for a period longer than 6 months).

It is important to note that there is a difference between short and long-term condo rentals. Short-term rentals are usually for a period from a single day to several weeks, while long-term rentals are usually for a period of several months to a year. A condo’s governing documents may have different requirements for both short and long-term rentals.

If you notice an issue(s) commonly associated with short-term rentals, you may want to first review your condo corporation’s governing documents to understand if your condo has any short-term related requirements or obligations.

Your condo corporation’s governing documents must be consistent with the Act, and their by-laws and rules must be reasonable.

Don’t have a copy of your condo corporation’s declaration, by-laws or rules?

The declaration, by-laws, and rules are important documents that govern the operation of the condo corporation. Click here for an overview of Governing Documents: Declaration, By-laws, and Rules.

References to the Condo Act

If your condo corporation’s governing documents deal with short-term rentals, section 119 (1) of the Condo Act requires everyone to follow them. This means that owners (and occupants) cannot rent out their unit if they are prohibited from doing so in the condo’s governing documents regardless if the municipality allows short-term rentals (refer to municipal requirements under Other Legal Considerations).

Section 117 of the Condo Act prohibits anyone from allowing or causing any condition to exist or carry on with any activity in a unit or in the common elements that are likely to damage the property or to injure someone. Owners who use their unit for short-term rentals are responsible for their unit’s occupants, their occupants’ guests, and their behaviour in the condo. This means that owners are responsible for ensuring that their occupants comply with the condo’s governing documents (e.g., complying with all noise-related rules). The responsibility for an occupant can also extend to any damage that a short-term occupant (or their guests) cause to the common elements.

Under section 17 (3) of the Condo Act, condo corporations are required to take all reasonable steps to ensure that everyone (including short-term tenants) complies with the Condo Act and with the condo corporation’s governing documents. This means that:

  • If the condo has prohibited short-term rentals, this prohibition must be enforced; and,
  • Condo corporations may need to hold owners responsible for any issues caused by the occupants, regardless if short-term rentals or prohibited or not.

That means that if your condo corporation is aware of any short-term rentals or other related issues that contravenes the corporation’s governing documents, they are legally required to take action to address it. This is why it is important for you to notify your condo corporation if you notice any issues associated with short-term rentals.

Other Legal Considerations

Rental Requirements

Owners should note that the Condo Act requires all owners who rent their unit to:

  • Within 10 days, notify the condo corporation of any newly created, renewed or terminated lease; and,
  • Provide all their tenants with a copy of the condo’s governing documents.

These requirements are found under section 83 of the Condo Act and applicable to all condo unit rentals.

Municipal Requirements

Before renting out your unit, it is important that you should also review your municipality’s by-laws for any prohibitions or requirements regarding short-term rentals.

Regardless of whether your condo corporation allows it, some municipalities have prohibited all short-term rentals, or require you to meet certain requirements before you are permitted to conduct short-term rental activities, such as obtaining a licence or registering as a short-term rental operator with the municipality.

Airbnb Friendly Buildings Program

The Airbnb Friendly Buildings program is a way that allows condo corporations to work with both unit owners and Airbnb to facilitate short-term rentals. This program allows condo corporations to be aware of who is leasing a unit in the condo and allow condos to list the requirements for renting a unit in the condo corporation upfront.

This program facilitates condo corporations that allow short-term rentals but want to be an active participant in the leasing process. Condos must apply to be part of this program. If you want to learn more, access Airbnb’s webpage here.

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