We’re hearing more and more about short-term rentals. In February 2023, nearly 30,000 listings for accommodations in Québec were listed on the Airbnb platform. In the midst of the housing crisis, accepting Airbnb rentals in a condominium building is far from unanimous.
For the Syndicat
From the point of view of the Syndicat de copropriété, it is possible to regulate short-term rentals to deal with this new reality, by including a specific clause to this effect in the Declaration of Co-ownership (in the section of the constituting act), and it may be possible to include a penalty clause imposing a sanction in the event of non-compliance with the Declaration and/or the Building Regulations.
Board members must ensure that clauses dealing with short-term rentals, as well as the penalty clauses that sanction them, are drafted in clear terms to avoid any ambiguity and ensure their validity in the event of a dispute.
The addition of a penalty clause to sanction non-compliance with the Declaration or Bylaws constitutes an amendment to the constituting act and must be approved by 75% of the votes of the co-owners present and represented at the meeting. It must also be notarized and published in the building index.
Any penalty clause adopted prior to January 10, 2020 and included in the By-laws of the immovable is deemed to be part of the Declaration of Co-ownership, but such clause may be amended by a simple majority of the votes of the co-owners present or represented at the meeting.
For co-owners
From the condominium owner’s point of view, it’s a good idea to read the Declaration of Co-ownership and the Building By-laws carefully to check whether Airbnb rentals are permitted in your condominium and avoid any unpleasant surprises.
Last March, the Superior Court in Copropriété de Griffin Îlot 10 Résidentiel v. Zhao recently recognized the validity of a penalty clause included in the Declaration of Co-ownership that cost a co-owner a great deal of money.
The co-owner was promoting and renting out her unit on a short-term basis on the Airbnb platform, even though this type of activity was prohibited by the building’s regulations.
The Declaration of Co-ownership provided for penalties of $1,000 for a first violation, $3,000 for each subsequent violation, and payment of extrajudicial fees incurred by the Syndicat in claiming these sums, to, among other things, force co-owners to comply with the Declaration of Co-ownership.
The co-owner was ordered to pay $83,387 ($49,000 plus extrajudicial fees of $34,387).
Particular attention must be paid by any co-owner wishing to put his private area up for rent on Airbnb to check whether it is permitted and the sometimes significant penalties he could be exposed to in the event of a violation.
Any further questions? The Dunton Rainville team will be delighted to help and advise you!