Short term rentals: Airbnb or Air be not

G.P. writes:

Dear Paul:

I am concerned by the fact that our condo board is allowing some of the unit owners to rent out their suite and are advertising it on Airbnb. Soon I am afraid that our building will become the Condo Hilton. Isn’t there anything we can do to stop this from happening? Any information would be helpful.

Paul replies:

Dear G.P.:

I feel your frustration. Your options are limited. I will highlight the issues for you, and hopefully, something might help. First, what is Airbnb? This an online service that matches short term renters with people who travel for business or pleasure. This matching is all done through the internet. Renters place an ad on the Airbnb site, and travelers can search for accommodations by the city, type of accommodation, and availability. It could be compared to Trivago that exists for hotels. Airbnb along with Uber, Skip-the dishes and Grub Hub, are known as part of the “sharing economy.” A trend towards entrepreneurship that is affecting the hotel, taxi and delivery industries.

Some people buy condo units as an investment. Investment not only for the long term when they sell the property, but also for the short term by providing visitors with the possibility of staying in a place that is almost like home and cheaper (usually) than a hotel. The problem arises when a building’s permanent residents encounter strangers in the hallways, the elevators, the gym, and the pool area. Since the stays are usually for one to three nights (could be more) there is a lot of coming and going when a project has several suites rented as Airbnb. Depending on the community, regular owners may feel that their safety and security jeopardized, the condo amenities overused, parking spaces invaded and whatever else you can imagine. It is not a good situation.

What can be done? A check of the municipal zoning by-laws might prevent short term rental activity akin to running a hotel business. It is worth exploring.

Unfortunately, in Manitoba Airbnb is not illegal. According to The Condominium Act a condominium corporation, or its declaration, or by-laws must not prohibit the rental of a unit by a unit owner. However, there may be ways around this prohibition. Most declarations have a stipulation that each unit shall be occupied and used as a private single-family residence and for no other purpose. If a board were to enforce such a clause in the declaration, I believe that it would have a good case. I do not believe that an Airbnb operation would qualify as a private single-family residence. In any event, you should consult a lawyer well versed in condominium law. In an Ontario court case referred to as Ottawa-Carleton Standard Condominium Corporation No. 961 v Menzies, 2016 ONSC 7699 (CanLII), the judge ruled in favour of the condo corporation when a similar clause was used to prevent Menzies from renting their unit on a short-term basis.

Boards may attempt to amend the corporation’s by-laws, however creating a rule that establishes the length of a stay to three or four months would allow for rentals and discourage the one- or two-night stays at the same time could be easier.

Also, the corporation should check with its insurance broker to determine if Airbnb type rentals might invalidate certain claims.

There is more to consider when rentals are concerned in a condo complex, and legal counsel should be able to help you. Until the issue is challenged in a Manitoba courtroom or the Condominium Act is amended to address short-term rentals, we will continue to struggle with the question.

This Post Has One Comment

  1. L.R.

    Fantastic answer – Thank you very much for this column. I would advocate your column being placed in the Winnipeg Free Press or the National Post. You have a great deal of knowledge to share. Louisa

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