Owner Occupied vs. Rental Units

December 2014

Condo owners, renters and absentee owners can view condo living quite differently. These differences can result in conflict if they are not understood and effectively managed. With recent increases in the number of leased condo units, there is a growing importance in managing these differences.

There is also a growing trend toward condo rentals. Urbanation reported a dramatic decline in condo sales throughout 2013 which helped increase the number of unsold new units to 20%. In 2013 the Multiple Listing Service (MLS) showed the number of rental transactions exceeding 20,000 units for the first time.

The more successful condo communities understand and manage this potential for conflict between those who live in their condo and renters. They understand the importance of rules and procedures that align the interests of these groups to the greatest extent possible.

Six ways in which the interests of condo owners and renters can conflict:

1. Renters generally take a shorter term perspective on the various issues affecting condo living. Owners who reside in their condo are more likely to take a longer term perspective because of their ownership stake in the building. Those who rent their condo to others can have a different set of interests when it comes to paying fees and maintaining the building.
2. Owners have a long term interest in maintaining their building and are more likely to support investments that yield a long term return. Renters are less likely to be concerned with the cost of maintenance or the ongoing maintenance of the building. If the building gets run down or damaged a renter finds it easier to move. An owner in the same building is less likely to move. They likely have a mortgage to pay and are not prepared to undertake the cost and effort of moving.
3. Renters are less likely to conserve in their use of heat, air conditioning, water and other services for which they do not pay directly. When these services are included in their rent there is no incentive to economize. This results in higher costs for owners who pay more when usage of utilities increases within the building.
4. Renters are less likely to conduct regular maintenance for their unit. Filter replacement, window caulking, water leaks and air vent cleaning are all necessary maintenance procedures. Avoiding these short term costs can result in more being spent on utilities, more damage in the building and a greater risk of fire.
5. There is a perception that it is renters who are more likely to cause damage to elevators, walls, amenities and other common use areas of the building.
6. Condo owners are governed by the Condo Act which does not apply to renters. This can make it more difficult to enforce building rules. While an effective set of rules may exist for a building, enforcement among renters can be more challenging.