Monthly Archives: March 2015

AirBnB: Short Term Accommodations within Stratas!

The first we heard of AriBnB was on CBC’s The National who then invited CHOA’s Executive Director Tony Gioventu to comment on the issue. Since then this online service has become front and center of conversation as owners are deciding to rent their suites to travelers from anywhere around the world. Naturally owners renting their premises are charging a short term accommodation rental rate which is much greater then the standard monthly rates, therefor making it a more profitable investment. However short term rentals raise many questions of security, damage to property, administration of rentals within a strata, bylaw violations, just to name a few.

So whats the deal?… Well the deal is about understanding the community and whether the community is in favor, or not in favor, and acting appropriately consistent to what the owners want to do with the property in question. Some owners don’t have a problem with short term rentals providing whatever the negative effects if any are responsibility of the strata lot owner doing the rentals. Others may not want so many transient people coming in and out of their ‘homes’. Which ever way the community is leaning there are sure to be some bylaws that may need to be developed to address specifically this type of rental accommodation. Also strata corporation are governed by the bylaws and enforcement from a strata perspective may prove to be difficult without bylaws directly addressing these short term accommodations.

At a presentation by Veronica Franco, a lawyer at Clark Wilson LLP in her presentation she noted the differences between leases and licenses. Leases granting an exclusive possession over the property and creates an interest in land, and a license is permission to use or do something on a property of land without the interest in land. Licenses are usually revocable at will and not assignable.  She noted that contracts through AirBnB and other sites were effectively a license and not a lease which then raises the question does the current strata corporation bylaws actually capture this type of rental. Do the move in move out fees apply if move in move out fees are given only to tenants? Tenants generally meaning people who have entered into a tenancy agreement to occupy a property. If these contracts are licenses to use the property perhaps then the strata may need to consult a lawyer to review their current bylaws and understand exactly if their bylaws have addressed this issue.

Generally speaking though AirBnb and the emergence of short term accommodations is contrary to most city bylaws. Homeowner suites on AirBnB and other short term accommodation sites are effectively operating like a hotel which most city regulations define anything less then 30 days as short term and would need to have a license to operate. The issue for cities is the enforcement of this bylaw as it can be difficult to fully ascertain the relationship between tenants and homeowners and generally city bylaw enforcement is currently only enforcing complaints received as the primary means of identifying these contraventions.

From the homeowners perspective if you are engaging in AirBnB rentals as this becomes a hot topic for stratas your best position would be to take a collaborative approach working with the strata and determining a reasonable set of rules a regulations that can be followed that is acceptable and addresses the concerns of the residence. Also you may expect that with short term rentals there would be a greater administrative cost to this and perhaps could expect a nominal fee to cover such costs.

As for the actual contract you engage with people traveling to BC, Its important to check with your homeowners insurance to make sure your covered in the event of a loss. At another presentation by Phil Dougan of Access Law, he noted that AirBnB offers some ‘security’ in that they advertise that they have 900,000 in insurance if a guest was to damage your property. But then further to went on to convey that AirBnB has nearly 50 pages of conditions for which a claim would be evaluated and determined whether or not to be paid out. Moreover some of the first representations a ‘host’ (home owner offering accommodation) must make is that they must agree to not violate and laws. And well as expressed above an owner is almost impossible to be able to meet those requirements as the service AirBnB promotes is generally illegal or defined as ‘Hotel’ accommodations according to municipal bylaws. So pretty straight forward: No coverage!

So needless to say this topic is very complicated and as Phil said its like the Wild West right now as laws are addressed. If you are a strata please consult with either your property manager and or lawyer for advise concerning this type of accommodation and if you are a homeowner take the time to determine whether this style of investment accommodation is really what you want. Moreover as transient as these travellers are ask yourself if something did happened what and how would you go about determining who they actually are how you would collect for damages. Generally investment is about limiting risk and this venture could prove to be beyond your risk tolerance.

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