Airbnb is a popular service that allows people to rent rooms, apartments and entire homes on a short-term basis. But the online community has come under fire in Toronto. As the proliferation of short-term rentals continues, condominium unit owners are increasingly concerned about security and noise. I am often asked whether condominium unit residents are legally permitted to rent their units through Airbnb, and whether condominium corporations can do anything to control the practice. The answers to these questions are maybe, depending on the condominium corporation and yes, but enforcement may be difficult.
Many condominium corporations have existing restrictions in their governing documents that would prohibit unit residents from renting units on Airbnb. While a corporation would not generally have an outright prohibition on the leasing of units in the normal course (and the courts have held that such an outright prohibition is unenforceable in any event), many corporations do not permit renting individual rooms to unrelated tenants, or entering into lease agreements that are less than one year in duration, or subleasing units. Any or all of these restrictions could, practically speaking, prevent a unit resident from renting their unit through Airbnb. It should also be noted that some condominium buildings have passed rules directly prohibiting the renting of units through Airbnb or similar services.
If a condominium corporation has existing provisions in its governing documents that would prohibit unit residents from renting through Airbnb, the corporation would have a legal duty to take reasonable steps to enforce those provisions. Enforcement could be either through a court application or through mediation and arbitration, though generally the corporation will try to resolve matters by having its property manager or lawyer write to the unit owner in question before proceeding to court or to mediation and arbitration. (Note that, if you are a unit owner in a condominium building that prohibits the renting of units through Airbnb and you do so anyway, the corporation may be able to collect the costs of its enforcement steps – which could be substantial – through a lien on your unit.)
A corporation that does not have existing restrictions could pass a rule to this effect. Pursuant to the Condominium Act, 1998, in order to pass a rule, the corporation’s board of directors must approve the rule, and give notice of the rule to the owners. The owners would then have 30 days to request a meeting to vote on the rule. If no request for a meeting is submitted to the board, or if the meeting is requested and the owners vote in favour of the rule, the rule becomes effective. It should be noted, however, that rules are required to be consistent with the condominium corporation’s declaration (the document that is registered by the developer when the condominium corporation is created). In a newer building, if the developer marketed the building to investors who wanted to use the units for short-term rentals, the declaration could include a provision stating that the corporation is not permitted to pass a rule restricting short-term rentals. In that case, the owners of 80 per cent of the units would need to approve a change to the declaration – a difficult threshold to reach.
Ultimately, it is up to the unit owners in each condominium corporation to decide what is best for their community as a whole, as the owners have the power to vote on what provisions are contained in the corporation’s governing documents. If you live in a building where the owners have decided to exercise their votes to prohibit the leasing of units through Airbnb, then you (and your neighbour) would be best advised to avoid doing so.
Timothy Duggan is a condominium lawyer and civil litigator with Horlick Levitt Di Lella LLP. Reasonable Doubt appears on Mondays. You can contact him on Twitter at @timmyd_ and tell him what you would like to read about in future columns.
A word of caution: You should not act or rely on the information provided in this column. It is not legal advice. To ensure your interests are protected, retain or formally seek advice from a lawyer. The views expressed in this article do not necessarily reflect those of Horlick Levitt Di Lella LLP or the lawyers of Horlick Levitt Di Lella LLP.
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