Goldhawk Group Canada provided PR support to a Toronto law firm battling for a client against condominium boards that wanted to prevent Airbnb short-term rentals. This blog has been posted on a site of René Clonfero whose Clonfero Law Firm is a plaintiff-side litigation law firm in Toronto.
Right-to-rent wins in court
Condominium boards are growing in numbers and power. This power is being challenged by Airbnb and its emulators. Various city councils in Canada are or will be devising regulations for short-term rentals. Before most do, including the City of Toronto’s council, a decision in Ontario’s Superior Court has overruled bans of Airbnb rentals in two buildings in Toronto and has questioned the right to rent itself.
My law firm participated in legal action between two sister condo corporations and the owners and mortgage holders of 714 units in the two buildings. I acted for Mason Hatahet who owned one unit while a second lawyer represented two other owners after being retained by DelSuites Inc., a part of the Tridel Group of Companies, builder of 80,000 homes over 80 years, including thousands of condos.
Years ago, Tridel inserted provisions in the declarations of some or all of condo buildings it erected. The developer inserted several clauses including this phrase: “Each dwelling unit shall be occupied and used only for residential purposes, or for the business of providing transient residential accommodation on a furnished or unfurnished suite basis…” Tridel nailed down its declaration by adding : “To ensure that no actions or steps are taken by or on behalf of the Corporation, or by anyone else, which would prohibit, limit or restrict the Declarant and/or any other unit owners, from leasing or renting any dwelling unit(s) in this Condominium from time to time, for any duration and on any number of occasions, and whether in a furnished or unfurnished state…” This phrasing goes on to prevent boards from limiting or restricting the minimum stay of a tenant or to impose any restrictions or conditions for transient accommodations.
Mr. Hatahet said, in his deposition, he meets his daily living expenses including his condo costs only by earning rental income from Airbnb. He relied on renting his unit when he bought it and had been assured in a disclosure statement that he could lease his unit ‘on a short-term or long-term basis, furnished or unfurnished and with or without maid, cleaning and laundry services. He understood ‘the proposed declarations of the (condo board) specifically permit such use.’.
Tridel witnesses admitted the developer was putting this language into condo Declarations to protect its business model and the ability of its subsidiary DelSuites Inc. to lease out space in many of Tridel’s condos. Later, Madam Justice Jasmine Akbarali said that if unit owners don’t like the business protections put into condo declarations they can look for legislative change.
The Justice found in favor of our arguments. She wrote, about the provisions stripping power from the boards: “In my view, these provisions … do not purport to grant rights. The right to lease a property short-term, or at all, is a right of ownership…”
The legal fights are far from done when it comes to challenging the power of condo boards or even councils. This judgement, in my opinion, makes a strong statement that could arise time and again in those challenges: “The right to lease a property short-term, or at all, is a right of ownership.”