CAN BOARDS BAN RENTING CONDO UNITS IN A BUILDING?
Sometimes a lot of time and energy is spent fighting tenants who care about their home
Q: I am the president of a low-rise apartment style condominium complex. We have 18 units in our complex. More than half of the units are rented out. The board wants to make renting units impossible or difficult. My questions are:
1. Can we pass a bylaw that makes it illegal to rent your unit? 2. Can we charge owners who are renting their units a damage deposit? 3. Can we prevent renters from being on our board? 4. Some of the owners who are renting their units are not paying their condo fees. What can we do? Please help!
A: Let me answer your questions in the same order listed above.
1. No, the condominium corporation cannot pass a bylaw that makes it illegal to rent units. Section 32 (5) of the Condominium Property Act makes it clear: no bylaw can restrict any lease between an owner and tenant. Short-term rentals in condos through online services such as Airbnb or VRBO are treated differently.
Short-term rentals are a permitted use of an owner's unit unless the bylaws say otherwise.
2. Yes! A condominium corporation may require an owner who rents their unit to pay a deposit. Any deposit charged to an owner cannot be more than the maximum amount of $1,000 or one month's rent, whichever is greater (accordingly, owners must also advise the condominium corporation of the amount of rent being charged in respect of their unit).
The condominium corporation must maintain an accounting of any deposits held, including providing the owners with a statement setting out any amounts used from the deposit and any interest earned. Any unused balance and interest thereon is to be returned to the owner when the owner ceases renting their unit. Further, unpaid deposit amounts are recoverable as though they are a “contribution” (that is, condo fee) and can therefore support a caveat.
3. The Condominium Property Act says at least two-thirds of the membership of the board must be owners, unless the bylaws provide otherwise. What do your bylaws say with respect to the makeup of your board?
4. If an owner is not paying their condo fees but has a tenant, the board can serve a notice on the tenant directing the tenant to pay their rent directly to the condominium corporation. The renter would not be in breach of their lease with their landlord (owner).
■ Helpful hint: The generalization you mention regarding renters is so rooted that many condo boards spend a lot of time fighting renters. Renters care about their condominium complex and home, and are active. I encourage boards to be open with all owners and tenants to ensure a variety of ideas, arguments and information. Being able to revise outdated stereotypes is an important part of learning. I encourage boards to be curious to hear what others think and not to spend time trying to rid a condominium complex of renters.
Roberto Noce, K.C. is a partner with Miller Thomson LLP in the Edmonton and Calgary offices. He welcomes your questions at alberta condo law@ miller thomson. com. Answers are not intended as legal opinions; readers are cautioned not to act on the information provided without seeking legal advice on their unique circumstances.
Twitter: @Robertnoce