The ability to rent a strata lot can be very important to some owners and the entire reason that they purchased the strata lot. However, the Strata Property Act does permit a strata corporation to restrict rentals: whether any rentals are permitted; how many strata lots may be rented at a time; or the minimal term for rentals (i.e. minimum one year).
In certain instances, rental bylaws cannot affect a strata lot. That depends on whether there is a rental disclosure statement protecting that strata lot from rental bylaws or whether the owner currently had a tenant in the strata lot when the rental restriction bylaw was passed. There are also specific exemptions from rental restriction bylaws such as hardship or renting to family members.
However, the issue has arisen in several instances as to whether short term rentals are protected under a rental disclosure statement. Under the common law, there is a difference between leasing a strata lot and licensing a strata lot. Short term rentals that mimic hotel use have been found to be licencing the strata lot rather than leasing the strata lot. The distinction is very important because it determines the rights of the renter, the owner and whether those ‘licenses’ are protected from rental bylaws.
The case of HighStreet Accommodations Ltd. v The Owners, Strata Plan BCS 2478, 2017 BCSC 1039, has confirmed that a rental disclosure statement filed by the owner developer doesn’t protect short term rentals from a rental restriction bylaw:
“ . . I conclude there is nothing in the legislation suggesting that occupancy of units arising outside of a tenancy agreement are protected in any way. In my view, that is the very reason why s. 143(1)(a) is phrased to apply to strata lots where the tenant occupies the strata lot when the bylaw is passed. The legislature could have said a rental restrictive bylaw does not apply until one year after a rental in place at the time the bylaw is passed expires. In my view, the phrasing chosen was to clarify only tenants occupying the lot can benefit from the non-applicability of rental restrictions.”
Further the Court noted:
“Section 143 of the Strata Property Act is not applicable to the licenses [short term rentals] entered into by HighStreet, and thus, those licenses can be restricted by the Strata Corporation, and [the bylaw] does therefore restrict HighStreet’s [short term rentals].”
Therefore, it is now clear that strata corporations can restrict short terms rentals with the proper bylaw.