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A Short History of Condominium Short Term Rental Regulation in Ontario & Alberta

Disclaimer: This is an interpretation of the case law from a short term rental manager with NO formal training in law. The intent of this is to give you some guidance and NOT legal advice. If you need legal advice, please speak to a lawyer.


I thought I would layout the history of short term rental regulations in Canada and our home province in Alberta. In general, some condominium corporations have been fighting against Airbnb for a long time. Some think that Airbnb will lead to more noise complaints, parties, security issues, and property destruction. There have been a few cases in Canadian law that shape how condominiums can regulate short term rentals. The first case was in Ontario so we will start there.

Ontario Regulations

OCSCC No. 961 v. Menzies (Dec 2016) – Ontario Superior Court of Justice[1]

The condo board of a luxury building in this case filed suit against an owner who was operating short Term Rentals in the building. The condo corporation has a bylaw that the minimum term for a lease is 4 months. The condo board said that this violated the following bylaws: 1) Has leases less than 4 months, 2) Single Family Dwelling – where there cannot be more than 1 family staying in one unit, and 3) Commercial Use of the unit.


The judge ruled that:

1) The owners were in violation of the bylaw that requires the units be leased for a minimum of 4 months.

2) Airbnb is not consistent with a single use dwelling - Single family use is incompatible with the concepts of "check in" and "check out" times, "cancellation policies", "security deposits", "cleaning fees", instructions on what to do with dirty towels/sheets and it does not operate on credit card payments — There was commercial use of unit.

3) Commercial Use was found to be present.


Hence the court sided with the condo corporation and found the condo corporation can limit short term rentals.

Alberta Regulations

In Alberta, the answer is not so clear because there is something in the Alberta Condominium Act [2] that is not in the Ontario Condominium Act. This is Section 32 (5) which states:


Section 32 (5) No bylaw operates to prohibit or restrict the devolution of units or any transfer, lease, mortgage or other dealing with them or to destroy or modify any easement implied or created by this Act.


Because of this section, a bylaw that restricts a lease term (like the 4 month minimum in the Ontario case) would be considered not valid because the Alberta Condominium Act will take precedence over any bylaws. Going along the same line of thinking, if a condominium corporation cannot restrict a lease term based on the single use dwelling/commercial use clauses because again the bylaws would be in contravention of the Alberta Condominium Act.

CC No 042 5177 v. Kuzio ABQB 152 – Court of Queen’s Bench Alberta [Feb 2020] [3]

This case was the first permanent ruling in the Alberta Courts. A condominium corporation in Edmonton “The Ten Lofts” applied to the court to stop the owners from short term renting the units.


The Judge in the case found that:

1) Airbnb rentals, like hotels, are considered licenses not leases when no lease has been entered into. A license is a contractual right to use the land but does not create interest in the land.

2) Condominium corporations can restrict licenses (where no lease has been entered into) through the ‘single family use’ and ‘commercial use’ bylaws of the corporation.


In this case it made it clear that if there is a “true” lease than a condominium cannot enforce against it. A lease in the Alberta Tenancies Act can be "Oral, written, or implied" as defined by the Alberta Residential Tenancies Act and also in that Act it does reference weekly tenancy agreements.


If you sign a lease with an Airbnb guest and the condominium corporation enforces against it then their only reasonable argument would be that the lease you had signed with the Airbnb guest is not a “true” lease and they have enforced upon a license.

CC No 042 5177 v. Kuzio ABQB 152 – Court of Queen’s Bench Alberta [Sept 2020]

The final hearing was set for Sept 2020. Written decision is pending.

References:

[1] Ontario Court Decision: https://davidsoncondolaw.ca/wp-content/uploads/2019/01/Ottawa-Carleton-Standard-Condominium-Corp-No-961-v-Menzies.pdf

[2] Alberta Condominium Act: https://www.qp.alberta.ca/documents/Acts/c22.pdf

[3] Kuzio decision [Feb 2020] is attached below




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