NOTE: This column is not a substitute for professional legal advice when it comes to short term rentals. Please speak with a Lawyer to discuss your particular situation and options. Keep in mind all condo buildings and the Government can change existing policy at any time.
Over the last few years I have had a few clients interested in pursuing AirBnB style investment properties, so I have done a lot of research into their options and the wording of Strata rental bylaws. As I mentioned above, I’m not a lawyer so get appropriate legal advice if this is important to you, but here are a few things I’ve learned from the research I’ve done:
(1) The City of Vancouver requires that anyone looking to rent their unit for less than 1 month (on AirBnB or any other site) must satisfy the following (including, but not limited to) criteria:
- The property must be the Owner’s “Primary Residence”.
- The building bylaws must allow short term rentals.
- The Owner must apply for and receive a Short Term Rental License from the City of Vancouver.
- For more information: https://vancouver.ca/doing-business/short-term-rentals.aspx
(2) Short Term Rentals like AirBnB are considered “licenses” rather than “leases”. Many Strata Bylaws allow Owners to enter into a “lease” for the use of their Strata Lot, but do not allow Owners to enter into a “license” for use of their Strata Lot. This wording would be very important in a legal battle involving an Owner vs Strata, so review your Bylaws in detail. Again, I am not a Lawyer, but here is a general definition of the terminology. Consult your Lawyer regarding any legalities.
- It’s a “license” when the Owner gives someone permission to use the space temporarily for a specific reason. As you can imagine, there is no BC Tenancy Agreement in place, but often, though not required, there is a written License Agreement between the two parties.
- It’s a “lease” when there is an agreement in place giving the tenant exclusive possession of the property, often via a BC Tenancy Agreement. Keep in mind, even if a BC Tenancy Agreement was not signed, certain situations may still legally be considered a standard Tenancy.
(3) There is a particular issue to be aware of when it comes to roommates or renting out extra rooms. A couple things to keep in mind:
- Some Strata Bylaws indicate that Owners cannot rent out “less than all of the unit”, which means you cannot rent out an extra room to a roommate. Bylaws often specify a certain length of time that someone is considered a “guest” so look for a Bylaw indicating this time period to determine if someone staying with you would be considered a renter or licensee (distinction would depend on your agreement with them).
- If you are renting out a room on a license basis, ensure it is allowed as per your Strata bylaws, even if you are still living in the property during the rental period.
- If you are renting out a room with a standard Tenancy Agreement in place, then technically this constitutes a rental as per Strata Bylaws, which means you should follow your building’s rental bylaws, including, but not limited to: submitting a Form K to the Strata, ensuring your Tenant knows the Bylaws and Rules, applying for permission to rent and following any rental bylaws regarding total number allowed by the Strata and minimum lease lengths.
(4) Review the Strata Minutes (going as far back as possible) to see if there is any discussion of short term rentals, standard rentals, bylaw wording, and fines for Owners not following the bylaws. If the building mentions that they have previously fined Owners for not following rental bylaws properly then you’ll want to tread carefully. Keep in mind new Strata Council members might have a certain desire to enforce these Bylaws even if previous Councils turned a blind eye. Strata Councils are technically required by the Strata Property Act to enforce Bylaws as written.
(5) I don’t own investment properties, nor do I rent my own home out on AirBnB, so I can’t speak for experience, but I have recently seen properties listed for sale that rent on AirBnB despite not satisfying the City of Vancouver Short Term Rental / AirBnB policy. I don’t know how these people are circumventing the rules, but I imagine it’s both the City (and in some cases, the Strata) not performing enough random audits to ensure people are following the rules.
In short, I say this to all of my clients looking for buildings that allow AirBnB: even if a building allows short term rentals right now, that Bylaw can change, along with Government policy, so your intention and investment planning should be to rent the unit on a long term basis with a standard BC Tenancy Agreement.
Here are a few sites to offer more information on the topics above:
- City of Vancouver Short Term Rentals Website: https://vancouver.ca/doing-business/short-term-rentals.aspx
- BC Tenancy Website: https://www2.gov.bc.ca/gov/content/housing-tenancy/residential-tenancies
- BC Supreme Court Case where a Strata prohibits Leases and Licenses: https://www.canlii.org/en/bc/bcsc/doc/2017/2017bcsc1039/2017bcsc1039.html
- BC Supreme Court Case where a Strata prohibits Rentals/Tenancies but not Licenses: https://www.canlii.org/en/bc/bcsc/doc/2018/2018bcsc2064/2018bcsc2064.html?searchUrlHash=AAAAAAAAAAEAFzIwMTcgQkNTQyAxMDM5IChDYW5MSUkpAAAAAQANLzIwMTdiY3NjMTAzOQE#_Toc12956758