For years the issue of short term rentals in Alberta condominiums has been a lively topic. Most condominiums don’t like short term rentals of units in their complex for security and other “wear and tear” reasons. SVR has typically advised boards and PM’s that despite other provinces banning entities like Airbnb and VRBO, that s 32 (5) of the Condominium Property Act is different, and does not differentiate between long term and short term “rentals”. However, there had not been any case law in Alberta touching on the issue. That has now changed. In Condominium Corporation No. 0425177 v. Kuzio the court has addressed short term rentals, but unfortunately not in full and final way (yet).
In Kuzio the condominium board challenged the Owners ability to use their units as short term renal accommodations. Under the Condominium’s bylaws, units were to be exclusively used as “one-family residence” and for residential, not commercial, purposes. The Owners claimed that using their properties as short term rentals did not violate the Bylaws, and if it did then the Bylaws were invalid under s.32(5) of the Condominium Property Act (the “Act”).
The application was put to a special hearing to be heard in February 2020. In the meantime, the Corporation wanted to stop the operating of short term rentals in its building and applied for an interim injunction against the offending Owners. In deciding whether to grant the injunction, the court went into great detail to assess the strength of the Corporation’s case.
After considering the arguments of the Owners and the Corporation, the court ultimately determined that the Corporation’s case for the Owners being in violation of the bylaws was strong and the Corporation was likely to prevail in subsequent proceedings. It making his decision, Justice Renke found that:
Renting units through AirBnB was undeniably a commercial purpose;
Renting through AirBnB was not a “Single family use”
AirBnB customers were not “Tenants” within the meaning of the Bylaws or the Act. They are licences not leasees (tenants)
The Bylaws cited above restricting Air BnBs did not violate the Act
While a Corporation cannot prohibit leases because of s. 35(2) of the Act, a bylaw prohibiting licenses is not caught by this section.
The court also went on to find the Corporation had suffered irreparable harm caused by the Respondents. While there was no evidence that the AirBnB guests had caused nuisance or property damage, there was a risk that they could in the future. Further, the owners did not agree to live in a hotel, the Owners behavior in renting AirBnB units was contrary to the local democracy of the condominium, the Corporation had a duty to enforce its own bylaws and the harm was that the Bylaws were being violated.
The court determined that while the Owners will suffer some financial losses as a result of an injunction, it will not result in irreparable harm.
Therefore, the Corporation established that the short-term rental of units in the condo was a violation of the bylaws and the court was justified in imposing an interim injunction until the hearing set on February 21, 2020.
Given the courts treatment of the short term rental issue, and characterizing short term rentals as “licenses” and not “leases”, and the occupants not as “tenants”, it is hard to see how the final outcome of this case will be anything other than denying the unit owners from being allowed short term rentals for their units. We shall keep watch for the final decision on this case, but it is possible given the interim order of the court that the owners don’t even proceed to the final hearing of the matter.
In any event, this case will give considerable ammunition to all Alberta condominiums who wish to restrict the use of Airbnb, VRBO and the like in their condominiums. Should any board have an issue with short term rentals and want to now deal with the problem when it was thought they could not previously do so, please contact the condominium department at SVR for further advice.