October 2016
Nobody wants to live in a hotel. Yet that is what happens when condo suites become short-term rental accommodation. Condo residents are forced to live with increased building traffic, pay more in fees to maintain their building and share space with transient guests. There is more building noise during the day and night plus less awareness or consideration for condominium by-laws and rules.
It may be financially enticing for a condo owner to rent their suite for short periods of time when the suite is not otherwise in use. Yet they are not just renting out their suite. This comes at a personal and financial cost to other condo owners who pay to maintain the building.
There are those who are in the business of providing short-term accommodation such as hotels. These businesses are licensed for this purpose. They charge rates to cover the costs of providing this service and the requisite taxes. When residential condo properties get into the business of offering short-term accommodation, it is often neighbouring condo suites that suffer so that a condo owner can undercut a legitimate business. They manage to do so by inconveniencing neighbours, adding to their costs and possibly avoiding the payment of taxes on business income. For these reasons condo corporations may discourage the use of condo suites as short-term accommodation of less than one year.
There are six strategies for discouraging short-term condo suite rentals.
Condo Declaration
The declaration may include provisions limiting use of condo suites for residential purposes or for private single families. There may be other provisions against boarding or rooming houses, or short-term occupancy.
Condo Rules
Condominium corporations can adopt rules preventing short-term rental accommodation or prohibiting short-term leases.
Local Laws
Local laws or zoning may prohibit the use of a residential property as a commercial business.
Tax Code
Canada Revenue Agency requires that earned income be declared and taxes paid. Knowingly allowing an undeclared commercial business to operate on a residential property may be problematic for a condo corporation.
Condo Insurance
The condo corporation’s insurance policy may not allow for short-term occupancy.
Condo Act Enforcement
The Condo Act requires an owner to advise the corporation when a lease is entered into, renewed or terminated. The owner must also provide personal information about the lease. The leasee must receive condo corporation documents – declaration, by-laws and rules.
