What does this mean for condos?
The final version of the by-law wasn’t much different from the original version. The one change of note was the adoption of a new limit on the number of guests permitted to sleep in any short-term rental, a maximum of two people per sleeping room.
There are two things in the new by-law specific to condominiums, that I thought I would highlight:
- Condominiums retain their authority to regulate short-term rentals by virtue of the Condominium Act. The new by-law won’t impact this authority. In other words, a condominium’s governing documents, including its Declaration and Rules, can contain additional restrictions with respect to short-term rentals;
- Condominiums that have a short-term rental ban will be able to register on the City registry. This way, the City won’t issue any short-term rental permits for that property.
You’ll notice that I haven’t mentioned when this new regime will be active and functional. The reason is that the Ottawa Short Term Rental Association has appealed by-law has to the Ontario Land Tribunal. It could be months before we know the result of the appeal.
Toronto went down a similar path with their short-term-rental by-law and the Tribunal dismissed that appeal. We’ll have to see, however, if the Tribunal adopts the same approach for the Ottawa by-law as it did for the Toronto one.
Assuming the Ottawa By-Law clears the legal challenge, the regulations will be implemented, essentially on a trial basis, for three years. I think the by-law would be a helpful new tool for enforcement of short-term rentals in condominiums. First and foremost, this means that City by-law officers can enforce the by-law. Furthermore, condominiums that already have short- term-rental prohibitions in place will have an additional layer of protection (if they register on the registry and thereby prevent hosts from trying to get permits for units at the condominium’s address.
Yet the story of this by-law shows that it is still worthwhile for most condominiums to consider passing their own short-term-rental prohibition, assuming their condo community wants to do so. It creates certainty rather than hope that the by-law survives the appeal, and allows the community to take advantage of the planned registry if or when the regime is implemented.
Assuming that the by-law passes its legal challenge, another area of uncertainty will be how the by-law is implemented for condos that permit short-term rentals but restrict them in some way, for example short-term rentals allowed for only one month of the year. How these restrictions would dovetail with the City’s new by-law is an open question.
In such cases – where a condominium restricts short-term rentals but doesn’t completely prohibit them – there will be some important issues to consider. Should the condominium still register under the City’s registration system? Will the City still help with enforcement of violations under the City’s by-law? I think the answer to this second question is “likely yes”, but these will be things to consider on a case-by-case basis.
David Lu is an Associate at Davidson Houle Allen LLP, a boutique condominium law firm serving Eastern Ontario.