21/03/13 – Jurisdiction Ontario
Part published on 01/01/70
The current hot topic is the legality of short-term tenancies, better known as “hotel-like uses”. This topic has recently boiled over in Ontario.
Part published on 01/01/70
The current hot topic is the legality of short-term tenancies, better known as “hotel-like uses”. This topic has recently boiled over in Ontario.
109 Front Street East, Toronto, comprises two condominiums, namely MTCC No. 1280 and MTCC No. 1385. These condominium corporations have been in a battle with Skyline Properties respecting the rights of Skyline Properties to lease units for short terms, resulting in a use which the court described as “akin to an hotel or apartment hotel”.
In addition, while this battle has been joined, Skyline has continued to acquire units. At the time of the court hearing, Skyline owned, operated or managed very nearly half of all units in MTCC No. 1385.
The court was asked to consider the following questions:
1. Did the short-term tenancies contravene the provision in the condominium declaration that each unit would be “occupied and used only as a private single family residence and for no other purpose”?
2. Did the short-term tenancies also violate the corporation’s rules which generally prohibited tenancies which were shorter than six months in duration?
3. Should an administrator be appointed pursuant to Section 131 of the Condominium Act, 1998 in light of the extent of Skyline’s ownership interests and the “obvious tension between two distinct groups having divergent interests” in the condominium?
The court’s answers were as follows:
1. The provision in the declaration does prohibit the short-term tenancies and the resulting hotel-like use. The hotel-like use is not “a private single family residence”.
2. The rules of the condominium corporation, including the rule prohibiting most tenancies shorter than six months’ duration, were properly enforceable. Those rules served primarily to further define the aforesaid provisions in the declaration. Skyline Properties could not avoid the clear requirements of the rules whether or not Skyline had acquired units prior to the passage of the rules.
3. This was a proper case for the appointment of an administrator. The court said:
“there exists a state of disequilibrium in the condominium corporation, precipitated by the obvious tension between two distinct groups having divergent interests. On the one hand, we have the owner-occupied units whose interest lies in what they perceive as an atmosphere whose dominant characteristics are those of a “private single-family” dwelling. That, they maintain, is consistent with their reasonable expectations when they purchased their units, as it is with rule E, which represents a proper exercise of the condominium corporation’s jurisdiction. On the other hand, we have the group, represented by Skyline, whose interests are principally commercial. That group are essentially absentee landlords, many of them overseas. In other words, their concerns relating to the prevailing atmosphere in the condominium complex is far less immediate.”
At about the same time, yet another decision was forthcoming: