Real Estate

Bylaw helps condos crack down on short-term rentals

By AdvocateDaily.com Staff

The City of Toronto’s move to regulate short-term rentals is good news for condo boards that want to crack down on such use by unit owners, says Toronto condominium and commercial litigator Megan Mackey.

Mackey, a partner with Shibley Righton LLP, says short-term rentals have proved troublesome in a number of condo corporations in the city.

“In downtown buildings, there are situations where there is heavy partying, which causes issues for residents and building managers. There are other problems associated with short-term rentals, too. So I think it’s great the City of Toronto is making changes to limit when dwellings can be rented out on a short-term basis,” she tells AdvocateDaily.com.

“It’s hard to know exactly what will happen if and when the zoning changes take effect, but we think it will certainly have a big impact on condominium boards' efforts to eliminate many of the problems associated with short-term rentals.”

According to a CBC report, municipal zoning changes will limit rentals in the city to the principal residence of homeowners and tenants.

Anyone who wants to list any other units will need to register with the municipality, pay a permit fee and submit to licensing under regulations that define short-term rentals as those lasting less than 28 days.

Mackey says the new rules will even apply to those condos that explicitly spell out in their declarations that short-term rentals are allowed and they don't impose any restrictions themselves.

“A condominium declaration cannot change the zoning,” she explains.

Condos that currently impose more restrictive bans will be able to continue enforcing those rules, despite the new bylaw setting looser standards, Mackey says.

In addition, she says condo corporations may even be able to enforce the bylaw on behalf of the city by enacting rules that would permit it to do so, rather than relying on the municipality’s stretched resources.

“These kinds of rules are allowed under the Condominium Act as long as they promote the safety, security and welfare of owners,” Mackey says.

“I’m not sure how many enforcement officers will be working on this once the bylaw passes, but it probably won’t be enough to stamp out the problems.”

She says it will be a while before the situation is completely clear because the final version of the bylaws may change depending on the result of a series of challenges at the Ontario Municipal Board (OMB).

“There are people who bought units expecting that they would be able to earn a living using short-term rentals and some of them are hoping to be grandfathered and exempt from the proposed zoning bylaw,” says Mackey.

The CBC story says the changes were originally scheduled to take effect on June 1, but that has been pushed back as the OMB gets ready to hear several appeals.

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