Will you continue to Airbnb your Condo?

Will you continue to rent your condo as an #AIRBNB

It’s been a two-year fight. Landlords and the booking site have resisted every step of the way, and refused to voluntarily comply with municipal regs. For more than 20 months the issue has been before a tribunal, and now the decision’s been made. City, 1. Airbnb, 0.
All those units bought to rent out by the night (usually against condo board rules) are now illegal. Short-term rentals will be allowed only inside a landlord’s principal residence, and for no more than 180 nights s year. Homeowners can rent a max of three bedrooms, and not for more than 28 days at a time. No rentals will be allowed in basement or secondary suites. Landlords need to register and pay a fee plus a 4% accommodation (hotel) tax on revenues.
Of course by registering, landlords also join a database which is shared with the CRA – so anyone not declaring Airbnb (or VRBO) income is probably asking for an audit.  https://www.greaterfool.ca/2019/11/20/shared-stupidity/

No confusion there. 

The question is will you continue renting as Airbnb? 

Court refuses to Amend Declaration of Condo Corporation

Do you have a unit at Toronto Standard Condo Corp 1556 Also Known As Skymark Center at Avondale - West Structure. Toronto Standard Condominium Corporation #1556. Address 78 Harrison Garden Boulevard?

Do you have a unit at Toronto Standard Condo Corporation 1600 Also known as  SKYMARK AT AVONDALE II, 80 HARRISON GARDEN BLVD, Toronto, Ontario?

Should you have known about this before your purchase? 

In a recent case, (TSCC No. 1556 and No. 1600 v. Owners of TSCC No. 1556, et al), the Ontario Superior Court of Justice refused to grant a court order to amend the declarations of two corporations to eliminate provisions in their declarations which specifically permitted transient, short-term rentals in the condominiums.

The two corporations were developed by the same builder and contained identical provisions in their declarations dealing with short-term rentals. The declarations specifically stated that transient short-term rentals were permitted in accordance with the applicable zoning by-laws. In addition, there were also numerous provisions in the declarations that any restrictions in the declarations were not to be construed to prohibit or restrict short-term rentals.

The condominium corporations took the position that the short-term rental provisions:

§ were inconsistent with the Condominium Act, 1998 (the “Act”) because they impermissibly granted rights relating to occupancy and use (when the Act only allows declarations to contain conditions or restrictions with respect to occupancy and use), and because they interfered with the ability of the board of directors to make rules;

§ were inconsistent with the City zoning by-laws; and

§ were inconsistent with a restrictive covenant registered against the condominium properties which prohibited the construction of commercial space.

All three of these arguments failed on the following basis:

§ The declarations did not grant any rights as the right to lease property is a right of ownership. The declarations merely confirmed that any provisions in the declarations which restricted uses, did not restrict the right to lease, and thus there was no inconsistency with the Act.

§ As section 58(2) of the Act specifically states that rules must be consistent with the declaration, the condominium boards clearly could not make any rules prohibiting or restricting short-term rentals, as this would be inconsistent with the declarations.

§ The wording in the declarations specifically stated that short-term rentals must be in compliance with the applicable City zoning by-laws in effect from time to time.

§ While short-term rentals of residential units may be a commercial use, this was not contrary to the restrictive covenant, as there was no construction of commercial space in the condominiums and the restrictive covenant did not prohibit leasing residential units for a commercial purpose.

§ The disclosure documents delivered to purchasers when they entered into their agreements of purchase and sale specifically stated that short-term rentals were permitted and some purchasers relied on the ability to lease their unit on a short-term basis when making their purchase decision.

As the court application failed, the only avenue to amend the declarations would be to obtain the written consent of the owners of 80% of the units in accordance with section 107 of the Act. Eighty per cent consent is a high threshold and often difficult to obtain. In this case, as the disclosure documents and the declarations clearly stated that there were no restrictions on the leasing of units, many of the owners may have relied on this when making their purchase decision, and thus would not consent to amending the declarations to prohibit or restrict short-term rentals. http://www.lashcondolaw.com/court-refuses-to-amend-condo-declaration-to-ban-short-term-rentals/ 



So these BUYERS who acted in good faith to purchase a suite for occupancy or investment;

a) Did they take the condo status documents to a lawyer to have it things explained?
     ....... 80 % do not  assuming that all condo documents are the same
b) Are you content to remain in your purchase?
c) Has your investment been soured by this experience?

Add your comments below 

Condo is a single family community housed in a community; NOT an AirBnb

A Condo Building is a combination of many Single Family residences.
NOT a hotel or Bed and Breakfast. It is not a Bnb

Its Not an AirBnb. It is a single family residence

In a recent case, Louiseize v. PCC No. 103, a condominium owner who knowingly breached the “private single-family residence” restriction in the condominium declaration for almost 14 years, was given 9 months to bring his units into compliance with the declaration.

From the time that he bought his units (which were purchased in 2001, 2003 and 2004) they were leased to multiple unrelated tenants and the owner failed to provide the condominium corporation with the names of the persons occupying the units, as required by section 83 of the Condominium Act, 1998 (the “Act”). Although the condominium corporation sent the owner the occasional notice reminding him of the restriction and requesting the names of those occupying the units, the corporation did not take any steps to enforce the declaration until 2013.

This case was originally heard by an arbitrator. After noting that the unit owner had knowingly breached the declaration and that the condominium corporation had for years breached its statutory duty under section 17(3) of the Act to enforce the declaration, the arbitrator gave the unit owner 9 months to bring the units into compliance. The arbitrator found that the the existing tenancies could be terminated with 60 days’ notice and that the units could be readily rented in compliance with the declaration, although this would result in a decreased rent of about $600 per unit per month.

The unit owner appealed the arbitrator’s decision and sought to have the order varied so that he would be allowed 75 months to bring two units into compliance and 55 months to do so for the other unit. The Superior Court of Justice found that the arbitrator had not made any errors in law and that the 9-month time period given by the arbitrator was reasonable. The unit owner did not provide any evidence as to why he needed a period of approximately 5 years to wind down his existing leasing arrangements. In addition, the unit owner had benefited financially by the corporation’s failure to promptly enforce the declaration.

The declaration also contained a non-waiver clause that stated that “the failure to take action to enforce any provision contained in the Act, this declaration . . . irrespective of the number of violations or breaches . . . shall not constitute waiver of the right to do so thereafter, nor be deemed to abrogate or waive such provision.” The unit owner unsuccessfully claimed that this non-waiver clause was contrary to section 17(3) of the Act as it was unreasonable for the corporation to enforce the declaration after acquiescing to the breach for so many years.

While the condominium corporation was ultimately successful in this case, it would have been in a stronger position had there not been such a long delay before it took steps to enforce compliance. When condominium boards become aware of any non-compliance with the condominium documents or the Act they should be taking steps to enforce compliance sooner rather than later.

http://www.lashcondolaw.com/enforcing-single-family-restri…/

When you moved in you agreed to abide by the Rules and Regulations of a condominium community. Once Rules are enforced you will also pay the legal fees to comply.

AirBnb Rules Toronto

If you are a tenant you must have permission from your landlord.

New By Laws Toronto

City of Toronto Proposes Measures to Restrict Short-Term Rentals

The City of Toronto is proposing to implement measures that will restrict the short-term rental market. The measures proposed by City staff include:

§ allowing short-term rentals only in a homeowner’s primary residence, with a limit of three rooms per dwelling unit;

§ mandatory registration of all hosts renting their homes on a short-term basis and payment of a registration fee between $40 and $150 per home;

§ mandatory licensing of short-term rental companies such as Airbnb and VRBO, and payment of a license fee between $5000 and $20,000, plus an additional fee per night booked; and

§ implementation of a hotel tax and a short-term rental tax, if the necessary provincial legislative approvals can be obtained.

This means that hosts would be allowed to rent their properties on a short-term basis only if they are renting extra bedrooms in their primary homes or if they are renting their entire primary residence while away. These proposed measures would not stop individual condominium corporations from banning short-term rentals altogether.

The proposed recommendations follow a report released in October of 2016, by the Executive Director, Municipal Licensing and Standards and the City’s Chief Planner outlining a number of concerns about short-term rentals. That report indicated that:

§ Short-term rentals that occur in non-primary residences, where the property owner is not present, pose the greatest risk of nuisance issues, such as noise, and safety concerns for neighbours in the community;

§ Short-term rentals are impacting the affordability and availability of housing units for long-term residents, causing a reduction in the supply of units available for long-term rental;

§ Short-term rental hosts pay property taxes at the lower residential rate, even though they may be renting their properties on a full-time commercial basis;

Short-term rentals have resulted in an uneven playing field for commercial tourism operators such as hotels and motels, who pay taxes at a higher rate and whose properties are subject to more onerous fire, safety and other regulations.

That report was followed by public consultations with and written submissions from various stakeholders including short-term rental platforms, neighbourhood associations, condominium industry associations, tenant advocates, hotel and hospitality representatives, and various provincial government ministries.

After the proposed measures are discussed by the Mayor’s Executive Committee, City staff will submit final recommendations in the fall of 2017 for approval by City Council.

These proposed measures will no doubt be well-received by many condominium corporations, particularly those corporations that do not have any restrictions on short-term rentals in their declaration or rules.

Beware of Renting your Condo as AirBnb

Your mortgage does not say You are permitted to rent as a commercial landlord; then you would be a commercial investor like Trump Tower  [how many people couldn't get financed]

Your mortgage requires you to stay within the provisions of your Condo By Laws.   If you contravene your by laws your mortgage is considered in default.

In the condominium sector, where, according to Gerald Miller, a managing partner at Gardiner Miller Arnold LLP, 80 to 90 per cent of Canada’s Airbnb market is concentrated, there are definite risks for lenders – and homeowners.
“If you contravene the declaration of bylaws and rules of the condominium corporation,” he points out, “that means you’re offside here. It means you’re in default of your mortgage, because the corporation can take action against you and whatever costs are incurred; they can lien your unit.”Mr. Miller says Airbnb renters flew under the radar for the first few years of the service’s operation, “but now it’s become mainstream. It is everywhere. So in the end when you are exposed you could have a problem. You either stop doing it or you are going to have a problem, not only with the condominium corporation, but with your lender as well.”  http://www.theglobeandmail.com/featured-reports/beware-the-risks-of-renting-your-house-through-airbnb/article30150563/

What's the lesson?

Get Factual advice.   Follow the By Laws and Have the correct Financing in place.

Can we talk?   Call me.