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.
MTCC No. 1170 is a luxury residential condominium in downtown Toronto. Apartments International operates its business by leasing residential condominium units from some of MTCC No. 1170’s unit owners and then marketing these units to members of the public as “furnished travel apartments” on a “pay-per-stay” basis. As a reaction to the use of units by commercial, hotel-like operators, the condominium corporation passed rules which, among other things, prohibited leases for a term of less than three months and occupancies for transient or hotel purposes. The condominium corporation then wrote to owners, demanding that they terminate their leases with Apartments International and that tenants of Apartment International be denied access to recreational amenities.
Apartments International then sued the condominium corporation for damages resulting from alleged interference with its contractual relations and its economic interests.
The condominium corporation brought a court motion seeking an order for summary dismissal of the lawsuit, on the grounds that there was no basis for the claims against the condominium corporation. The court agreed and threw out the lawsuit. The court said that “there is nothing illegal or unlawful in MTCC No. 1170 taking steps to ensure compliance with (the particular rules)”. The court said that this was the condominium corporation’s obligation under the Condominium Act. The court also said that the letters sent by the condominium corporation to unit owners were justified. Finally, the court found that there was no evidence of economic loss upon which there would be any real chance of success at trial.
The bottom line is as follows. Condominium corporations are succeeding in their efforts to prevent “hotel-like” operations in “normal” residential condominiums. Furthermore, the courts seem to be prepared to step in where there is a danger that the “hotel-like” operators may gain control of the condominium.
I suspect that the war is by no means over. The stakes are high. There is an obvious market for such short-term tenancies and the potential revenues are evidently significant. However, the battles, thus far, have been won by the condominium corporations.