Much like Uber and Lyft have transformed the taxi industry, the hotel industry has been altered by the rise in use of services such as Airbnb, which allows owners or tenants of properties to offer them up as short-term rentals. However, the backlash against such services has been building. Recently, a decision from the Alberta Court of Queen’s Bench ruled on whether or not a condo board could prevent unit owners from offering their units as short term rentals when no lease is entered into.

A clash of interests

The applicant in the case is a corporation (“the corporation”)  which operates a condo building in Edmonton. The building contains 69 residential units.

The corporation became aware in 2018 that four of the tenants had been listing their units on short term accommodation websites where rentals were offered without leases being signed. The corporation informed the tenants that short term rentals of their units was against the bylaws of the corporation. The corporation went to court because they claimed the unit owners had not ceased in offering their units as rentals. The trial was held following an order for an interim injunction.

How is a condo different than a house?

The court took some time to explore the differences between traditional homeownership and condo unit ownership, noting that there is no unrestricted right to the alienation of the unit and that the unit owner agrees that a condo board is able to enforce bylaws about how units can be used as described in the legal framework of the condo. The court said that agreeing to this legal framework “necessarily involves a surrender of a measure of autonomy by individual unit owners which is offset by the advantage such an arrangement brings.”

Are short term rental guests tenants?

The condo board’s bylaws stated that units in the building could only be occupied by the owners’ family and guests, or a tenant of the owner (including family and friends). The unit owners made the claim that short term renters qualify as tenants, even if for just one night. However, the court did not agree, stating that for someone to be a tenant of a place, it means they must be domiciled there, writing

“A domicile can generally be defined as a location where a person habitually resides. A domicile is where one would keep important documents and other personal items and where one would store the bulk of one’s clothing, habitually prepare and eat meals, sleep and spend leisure time. A domicile is typically what one would refer to as ‘home’ and which would be registered with various governmental agencies and would be used as a postal address.”

The court ruled that short term renters who don’t enter into a lease are staying as something closer to hotel guests than as tenants. If this contravenes the bylaws of the corporation, then the unit owners are not allowed to offer their units as short-term rentals. The court ordered that the former temporary injunction be made permeant.

Condominium disputes require legal advice from knowledgeable counsel with experience addressing such matters and who understands the complex condo industry. Contact HMC Lawyers to speak with a member of our Advocacy Team and get strategic and trustworthy advice. Call 1-800-480-3534 or contact us online. We represent clients in Calgary, the province of Alberta, and across Western Canada.