Law Times

Law Times • January 22, 2018 Page 11 www.lawtimesnews.com Sharing economy will continue to grow Short-term rentals present legal issues BY MARG. BRUINEMAN For Law Times C ondominium boards are adopting a variety of approaches to allow or prohibit short-term rentals, as municipalities and courts have also started to weigh in on the issue. Some condo corporations, concerned with additional wear and tear as well as the security risks imposed when more people have access to a building, have imposed restrictions on the leas- ing of units. Just how unit own- ers are restricted from renting out their units on a short-term basis also varies from building to building, say lawyers. "This area of law is changing rapidly and it's evolving," says Laura Glithero of Cohen High- ley LLP Lawyers in London, Ont. "I think it's important for condo corporations to remem- ber that declarations are re- ally the central document . . . in terms of what limits are put on the use of the unit." She says examining the con- do's status certificate during the early period of acquiring a condo can save owners and their lawyers from complications down the road. Glithero says the declaration for each property can differ dra- matically. Some, for instance, will contain provisions to specif- ically allow short-term rentals, while others will prohibit them, either implicitly or explicitly. The onus is on the purchaser to ensure their expectations are consistent with the goals of the board and to pay attention to re- quirements, Glithero points out. "As a condo corporation law- yer, I think it would save a lot of hassle for unit owners if that conversation happened when the status certificate was ob- tained during that initial period where [a person is] reviewing the documents and confirming that intended use is consistent with the restrictions on use," she says. A single family-use provision in the condo's declaration is one of the ways short-term rental could be prohibited in individu- al units, she says. While some condo boards have enacted a rule to provide a broader interpretation of fam- ily when referring to their single family-use provision, the defi- nition adopted by the courts is narrow and excludes the ability to use the condo for short-term rentals, observes Cheryll Wood, a condo lawyer with Davidson Houle Allen LLP Condomini- um Law in Ottawa. In 2016, Ottawa-Carleton Standard CC 961 v. Menzies reinforced the definition of a family as a social unit consist- ing of parents and their children, whether natural or adopted, and other relatives living with the primary group. It also con- firmed that rules requiring leas- es to be more than four months are valid and enforceable. A declaration that states the units are to be used for residential purposes also prevents the use of short-term rentals, adds Wood. Condo corporations are obliged to enforce their rules, so if a unit owner complains that another unit is being rented out nightly when the declaration forbids it, the corporation must take steps to prevent that type of use by the unit owner. In addition, some munici- palities, such as Toronto, have passed their own bylaws regu- lating short-term rentals. But Wood warns municipal regula- tions don't change the approach adopted by the condo board. The condominium's right to regulate and prohibit short-term rentals is separate and apart from any municipal regulations that come into force. A municipality's bylaws don't change the rights of the condo corporations' ability to enforce the existing provisions. That condo bylaws trump any city regulations can be the source of confusion, observes Toronto condo lawyer Denise Lash, who is preparing for the rollout of Toronto's new rules expected this June. "Now that the City of To- ronto has these regulations, it sort of complicates things, be- cause owners may interpret that as meaning 'Well, now I can do Airbnb' in buildings that pro- hibit it," says Lash, principal of Lash Condo Law in Toronto. "I'm recommending that con- dominium corporations now do newsletters, notices, explaining to residents living in buildings what they can and cannot do." She suggests condominium corporations and their lawyers be proactive by advising boards of directors to amend their rules to incorporate the City of Toronto's requirements. But some declara- tions are designed to allow for short-term rentals. An Ontario Superior Court of Justice was re- cently asked to change that pro- vision in the declaration of two condominium corporations. In TSCC No. 1556 and No. 1600 v. Owners of TSCC No. 1556, et al, the boards argued the declarations were inconsis- tent with the municipal zoning bylaw and restrictive covenants. They sought to reverse provi- sions in their declarations per- mitting short-term rentals in the condo units, but they were unsuccessful. In addition to specifically allowing short-term rentals, the declarations also stated that any restrictions were not to be construed to prohibit or restrict short-term rentals. The alternative to going to court was to seek the necessary FOCUS Denise Lash says the fact that condo bylaws trump any city regulations when it comes to short-term rentals can be a source of confusion. See New, page 12 Well-known condominium authority Audrey Loeb brings you up to date on all of the opportunities and challenges of the Condominium Act, 1998, as well as other complex issues arising in condominium law. Written for lawyers, property managers, boards of directors and unit owners alike, The Condominium Act: A User's Manual, 5th Edition is the most convenient and accessible source of answers to the questions that arise on a daily basis. 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