Release date: December 11, 2019
As many people reading this will be aware, the City of Toronto passed by-laws in December 2017 to restrict the operation of short-term rentals throughout the city. Under the City by-laws, short-term rentals (defined as being rentals for a period of less than 28 consecutive days) are permitted as long as they are operated out of the principal residence of the short-term rental operator. The by-laws allow up to three bedrooms in the operator’s home to be rented an unlimited number of nights per year, and the entire premises up to 180 days per year. The purpose of the City by-laws was to prevent people or companies from purchasing or leasing dwelling units for the sole purpose of operating year-round short-term rentals, in order to return these units to the long-term rental pool.
The City by-laws were appealed by short-term rental operators, and the appeal was heard by the Local Planning Appeal Tribunal (LPAT) over nine days in August, September and October 2019. While the appeal was pending, the City by-laws could not be enforced. On November 18, 2019, the LPAT released its decision upholding the City by-laws. As such, the by-laws are deemed to be in force effective immediately.
For condominium corporations in the City of Toronto, the implications of the LPAT’s decision appear clear. All condominium corporations in Toronto are required to comply with applicable municipal by-laws (in addition to the Condominium Act, 1998 (“Act”) and the corporation’s governing documents), and most corporations’ declarations contain a provision to this effect. As such, any unit owner or occupant who operates a short-term rental from the unit in contravention of the City by-laws would also likely be in breach of the corporation’s governing documents.
Condominium corporations have a duty to take reasonable steps to enforce its governing documents under the Act. Any corporation that knows or suspects that it has unit owners or occupants who are in breach of this City by-law (particularly those for whom the unit is not the primary residence) should consult with its lawyer about enforcement options.
On December 3, 2019, short-term rental operators announced that they would be seeking to appeal the LPAT decision. No hearing date for the motion has been announced as of the date of this Newsflash.