Rentals are often a divisive issue for owners of strata property. There is still a commonly-held belief that the presence of tenants will reduce property values in a strata building and that tenants are more likely to cause nuisance problems for the strata council and other owners to deal with. This is not always the case as a recent BC court decision dealing with an “impossible” owner shows [Strata Nightmares: Bullies Beware]. Nevertheless, many strata corporations have bylaws restricting the number of rentals allowed.
If you are buying a condo (a residential strata lot) with the intention of renting it either immediately or sometime in the future you must look to see if there are any rental restrictions attached to it. This means you will have to find and review the applicable local government or municipal zoning rental restrictions and the Strata’s by-laws and amendments. If the local government and the strata corporation do not have rental restriction bylaws, then generally you should be able to rent out your strata lot.
Even if the Strata Corporation does have rental restriction by-laws, such as those which have a ‘rental count’ limiting the number of strata lots that can be rented and/or limiting the length of time a strata lot may be rented, these may not apply to your situation.
Rental restriction by-laws, such as a ‘rental count’ will not apply if you are renting to a family member. A family member includes your spouse (including common-law spouse), your parent or child, or the parent or child of your spouse.
Rental restriction by-laws will also not apply if you apply for an exemption and obtain permission from the strata council to rent your strata unit based on ‘hardship’. A strata corporation must not act unreasonably in refusing to grant the rental exemption but the strata corporation may impose a time limit on the duration of the ‘exempted’ rental. If a strata lot is rented based on the hardship exemption, it is not included in the strata’s ‘rental count’.
Finally, the terms of the Strata Corporation’s Rental Disclosure Statement, which is a document filed by the Owner/Developer of the strata property, may exclude or limit the application of rental restriction by-laws.
The date the Rental Disclosure Statement was filed is key. If the Rental Disclosure Statement was filed on or before December 31, 2009, any subsequent rental restriction by-laws passed by the Strata Corporation, do not apply to the strata lots until either the sale of the strata lot by the strata lot’s first purchaser or the expiration of the Rental Disclosure Statement. You should also note that the Rental Disclosure Statement may not expire if it states that it is for an indefinite period. If the original owner is renting out the strata lot then that rental is not included in the ‘rental count’.
If the Rental Disclosure Statement was filed on or after January 1, 2010, the eligibility to rent the strata lot attaches to the strata lot itself and is carried through to each subsequent purchaser. This continues until the allowable rental period expires in accordance with the terms of the Rental Disclosure Statement.
To determine if there is a ‘rental count’ restriction, review your strata by-laws. A bylaw may, for example, limit the total number of rented strata lots to a specific percentage of the total number of strata lots in the building (e.g. 10%).
You also need to know how many strata lots are currently rented so ask to see the Strata Corporation’s inventory of rentals. That will tell you the type of rentals (e.g. whether the rentals are to family members, hardship exemptions, or by first purchasers), any rental time limit imposed on the unit and the expiration of the rental time period on the unit.
If you are already an owner and have run up against a rental restriction that you think is unfair or has been misinterpreted by the strata council, contact us. We can help.