With the rise of condominium ownership in Ontario, many owners seek ways to maximize the income earning potential of their units by renting them out. Many have taken liberty in the nomenclature of the Corporation’s Declaration, to include rentals to students.
The wording in the Declarations is typically clear, in that “each unit…shall be occupied by and used only as a private single family residence and for no other purpose…”.
In a recent case, Ballingall v Carleton Condominium Corporation No. 111, the court confirmed that a Corporation can, and should prohibit the leasing of condominium units to unrelated tenants when the Corporation’s Declaration limits the use to “private single families”.
The court confirmed that, unless the Declaration defines otherwise the meaning of the expression “private single family”, it means exactly what it says: units cannot be rented to multiple, unrelated, transient tenants, such as unrelated students sharing accommodation for a short period of time. In fact, the judge opined that the sharing of a kitchen, living room and bathroom while each student occupies separate bedrooms may in fact constitute a rooming house – which had always been prohibited at this Corporation.
Boards and their condominium Property Managers may see this recent decision as a way to address the increasing problem of short-term rentals to transient tenants such as those attracted by AirBNB and other comparable organizations.
The most important lesson for Corporations is that they must enforce their Declaration rather than try to find a way around it, unless they successfully pass an amendment. Owners are entitled to have the Declaration enforced. Corporations must be careful when they adopt Rules. The Rules must be consistent with the Condominium Act, the Declaration and the By-laws. The Rule must also be reasonable. Corporations should consider having their Rules reviewed by legal counsel before adopting them to avoid the turmoil and cost of litigation.