The Air BnB platform has generated a lot of press since its inception, and condominiums have become properties well suited for short-term rentals.
It remains to be seen, however, whether the measures put forth by condo associations to guard against short-term rentals are effective, or indeed legal. The three most frequently used approaches can in some cases pose problems, or prove to be ineffective:
- one deterrent is to establish penalties in the condo agreement or in the condo association by-laws. However, the law stipulates specific criteria for such penalties, one being that they must be very specific and reasonable. Otherwise they will be considered null and void, or the penalty fees might be reduced;
- passing such a by-law can have a deterrent effect, but might not always produce the legal effect desired. The Civil Code states that no restrictions can be placed on the rights of condo owners if they are not justified by the purpose or "vocation" of the building;
- modifications to a condo agreement are often invalid, for the law forbids any modification that changes how a condo owner uses his or her unit.
These solutions can be effective deterrents, but they must be drafted with care. Do not assume that they will readily stand up in court. One way of settling problems is to change the condo ownership agreement so that it specifies that the residential vocation of the building is incompatible with short term, Air BnB-style rentals or commercial rentals. But the modification must be rock solid and approved by the other condo owners. 75% of co-owners (representing at least 90% of the votes of all co-owners) must vote in favour of such a modification.
François Nantel and Élise Veillette
Cain Lamarre, Lawyers and Notaries