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Single Family Use Condo & Airbnb

Does your condominium allow unit owners to rent out their units for terms as short as one night?  A fairly recent decision by the Ontario Superior Court of Justice clarified the language in the Declaration to prohibit this conduct.

In this case, the Condominium Corporation brought an application to prevent owners of various residential units from renting out their units on a nightly basis. The Condominium Corporation had passed a rule stating that owners could not enter into leases of less than four (4) months.  The Court found that this rule was reasonable and did not interfere in any way with the ability of the unit owners to rent their units to more traditional long-term tenants

The Declaration also stated that the units were for “single family use” and the Courts held that this could not include the use of the unit in the manner similar to a hotel.  The Court found that the words “single family use” were not compatible with concepts such as “check-in”, “security deposits” and “cancellation policies”.

In light of this case, the statement in your Declaration that the unit must be used for residential purposes may be insufficient to prevent very short term rentals.  It would be necessary to amend the Declaration and this will require 80% of the unit owners to agree.

Recent Court decisions have also clarified the circumstances under which the Court will force “deplorable” owners to sell their units.
Firstly, the Condominium Corporation must put the unit owner on notice of their unacceptable conduct and give them an opportunity to change their behavior. If the owner persists in the behavior, the Condominium Corporation must go to Court and obtain a Court Order prohibiting the owner from continuing the conduct.  Only if the owner breaches the Court Order is there the likelihood of a forced sale. Finally, the Court refused to institute any process against the unit owner evaluating her mental competence.  The Court felt that it was too intrusive.

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This article is provided for general information purposes and should not be considered a legal opinion. Clients are advised to obtain legal advice on their specific situations.

If you have questions, please reach out

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