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#18644
OCSCC # 961 v Menzies et al : LAWYER'S AirBnB operation ORDERED HALTED by Declaration & Rules 2016/12/11 20:31  
Winning counsel Rod Escayola thinks "it’s going to be a GAME CHANGER in the Province of Ontario".

Media reports have picked this up quickly & many agree.

( Understanding this :

This decision is about AirBnB style, hotel-like operations - 'quickies' similar to the Innkeepers Act - NOT bona fide, Declaration-compliant, long term leases of condo units to single family tenant occupants.

Why the attention to this decision ?

Deconstructing a Declaration that prohibits all usage but laconic "single family usage only", Justice Beaudoin however rules expansively that short term sequences of single family users in a hotel-like operation, DO NOT constitute 'SINGLE FAMILY'.

He rules they are a commercial use. And one thinks elsewhere of the bizarre defence that DORMS of unrelated occupants with locked bedrooms - frequently paying separate rents under separate lodging documents - could be claimed to be a 'single family' ! ! )

BUT one can expect these counter-arguments & more :

That there is allegedly ZERO difference between 365 different single families using a unit - PURELY IN SEQUENCE - and an unchanged single family using it all year.

That allegedly this decision wrongly deprives the unit owner of a property right that could & should only be so limited by a Declaration. That the OWNERS THEMSELVES - rather than an unelected judge seeking to legitimize judicial activism from dorm judgments - should alone be altering that Declaration after the initial registration. That in the U.S. enforcing this latest judgment by 'state agency' might even be contrary to the 5th & 14th Amendments as depriving property without due process

The Decision :

Applying a condo Declaration definition of 'single family' use and a new Rule to apply that by limiting leases to no shorter than four months, a no-nonsense Ottawa judge has issued a section 134 Compliance Order to halt a "hotel-like" operation.

It was conducted in a central core highrise unit owned by a lawyer & his wife who 'leased' such unit to their "management company".

And this howler :

at AirBnB - one of 9 such sites held being used for marketing - the judgment's para 8 cites that customers were urged to :

" . . . be discreet about mentioning AirBnB to anyone in the building and under no circumstances should (guests) ever leave the keys with the concierge”

Winning Counsel Describes :

Dec 8/16 Winning counsel Rod Escayola LLB Gowlings WLG Ottawa : " Airbnb Is Incompatible with The “Single Family Use” Provision of Most Condo Declarations"

http://condoadviser.ca/2016/12/airbnb-is-incompatible-with-the-single-family-use-provision-of-most- condo-declarations/condo-law-blog-Ontario

From the Judgment :

OCSCC # 961 v Menzies,White & DGM Management 2016 ONSC 7699 issued Dec 8 2016 http://canlii.ca/t/gvzwx

Excerpting Mr Justice Beaudoin :


". . . (D) Do the Declaration, the Bylaws and the Rule prohibit the form of short term rental or other uses engaged in by the Respondents?

[46] Section 7(4)(b) of the Act provides that a Condominium Declaration may contain conditions or restrictions with respect to the occupation and use of units, as well as conditions or restrictions with respect to the lease of units.

[47] Article 3.1 of OCSCC 961’s Declaration provides that its residential units are to be occupied “only for the purpose of a single family dwelling which includes a home office […] and for no other purpose”.

[48] In the absence of a definition in the condominium documents of what constitutes a “single family”, the courts have defined a “family” as a “social unit consisting of parent(s) and their children, whether natural or adopted, and includes other relatives if living with the primary group”. [5]

[49] I accept the Applicant’s argument that a “one family residence” is “a basic social unit which involves more than merely sharing short term temporary sleeping quarters and shared facilities on a rental basis” and that courts have ordered compliance and enforced single-family provisions.[6]

[50] Based on the evidence before me, there is no doubt that the Respondents, who have leased their unit, on a repeated short-term basis in a hotel-like operation, are in breach of the Declaration.

[51] “Single family use” cannot be interpreted to include one’s operation of a hotel-like business, with units being offered to complete strangers on the internet, on a repeated basis, for durations as short as a single night.

Single family use is incompatible with the concepts of “check in” and “check out” times, “cancellation policies”, “security deposits”, “cleaning fees”, instructions on what to do with dirty towels/sheets and it does not operate on credit card payments.

[52] Moreover “Single family use” could not have contemplated including the use of a unit to house out-of-town witnesses and experts for trial preparation or the unit being offered on silent auctions for not-for-profit organizations or to hold a law firm’s office functions and Christmas parties.

What has happened in this case is a commercial use of the unit.

[53] Section 58 of the Act gives OCSCC 961’s directors the authority to make rules as follows:

58. (1) The board may make, amend or repeal rules respecting the use of common elements and units to,
(a) promote the safety, security or welfare of the owners and of the property and assets of the corporation; or
(b) prevent unreasonable interference with the use and enjoyment of the common elements, the units or the assets of the corporation.

(2) The rules shall be reasonable and consistent with this Act, the declaration and the by-laws.

[54] Rules preventing short-term leasing that are not so overly restrictive as to completely negate or fundamentally alter the right of owners to lease their units to traditional tenants have been found valid and in compliance with s. 58 of the Act. Specifically, rules requiring that leases be in excess of 4 months have been found to be valid and enforceable.[7] . .

[55] I conclude that the Declaration and the Rule validly prohibit the form of short term rental or other uses engaged in by the Respondents. ...

Footnotes :

[5] Chan v. T.S.C.C. No. 1834, 2011 ONSC 108 (CanLII), paras. 29-31; aff'd 2012 ONCA 312 (CanLII) –York Condominium Corporation No. 17 v. An Ge, 2013 ONSC 3328, para. 27-29;Audrey Loeb, Condominium Law and Administration (Toronto: Carswell), at chapter 3(1)(b)(ii)(G)

[6] York Condominium Corporation No. 17 v. An Ge, 2013 ONSC 3328, paras. 27-29; Nipissing Condominium Corporation No. 4 v. Kilfoyl, 2010 ONCA 217 (CanLII);Chan v. TSCC No. 1834, 2011 ONSC 108 (CanLII), paras. 32; aff’d 2012 ONCA 312 (CanLII); Ballingall v. Carleton Condominium Corporation No. 111, 2015 ONSC 2484 (CanLII);Audrey Loeb, Condominium Law and Administration (Toronto: Carswell),

[7] MTCC No 850 v. Sylvia Oikle, [1994] O.J. No. 3055 (S.C.J) at para. 31;Skyline Executive Properties Inc. v. Metro Toronto Condominium Corp. No. 1280, [2001] O.J. No. 3512 (S.C.J.) at paras. 17-19;Apartments International Inc. v. Metro Toronto Condominium Corp. No. 1280, [2002] O.J. No. 3821 (S.C.J.) at para. 28 ; Ballingall v. Carleton Condominium Corporation No. 111, 2015 ONSC 2484 (CanLII) at paras. 73-74 “.
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#18646
legal articles quickly appear about OCSCC # 961 v Menzies et al 2016/12/13 20:52  
Dec 12/16 by Jim Davidson LLB ( now Davidson Houle Allen LLP ) “Recent Decision Addresses Short-term Rentals” Condo Law news http://www.condolawnews.ca/e/recent-decision-addresses-short-term-rentals.cfm

Dec 12/16 “Ontario Court Decision on Short-Term Rentals in Condominiums” http://www.lashcondolaw.com/ontario-court-decision-on-short-term-rentals-in-condominiums/

****

*** caution: the following online report contains serious mis-statements : https://news.vice.com/story/new-airbnb-ruling
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#18647
more articles arrive : Declaration definition torpedoes LAWYER'S AirBnB operation 2016/12/15 21:35  
Dec 14/16 “Ruling could help condos fight short-term rentals. Judge finds ‘single-family use’ precludes Airbnb-style accommodations” by Michelle Ervine at https://www.reminetwork.com/articles/ruling-help-condos-fight-short-term-rentals/

Dec 12/16 Ottawa Business Journal “Airbnb hits legal snag in Ontario following Ottawa condo court case” by Craig Lord http://www.obj.ca/Local/Tourism/2016-12-12/article-4702773/Airbnb-hits-legal-snag-in-Ontario- following-Ottawa-condo-court-case/1

Noted by the anonymous folks at CondoMadness : lawyer Shawn Pulver's undated comments : ? mid Dec /16 “Airbnb - Why the Recent Court Decision in Ottawa is only the First Step” by lawyer Shawn Pulver ( partner- Macdonald Sager Manis LLP) http://campaigns.brandanchor.com/t/d-CA170ECF6D69C2C3
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#18649
Will Ontario see a counter attack ? How Florida handled it .(Yes this ain't Florida) 2016/12/19 02:06  
Naples Daily News Fla Dec 17/16 (Poliakoff Q&A) “Am I grandfathered from new rental restrictions?

http://www.naplesnews.com/story/money/real-estate/2016/12/17/am-grandfathered-new-rental- restrictions/94729556/
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#18658
Bob Aaron (ToStar real property law expert) reviews OCSCC # 961 v Menzies et al 2016/12/31 20:25  
ToStar lawyer columnist Bob Aaron expresses some déjà vu in recalling the 2001 & 2002 Metropole judgments in Toronto - M.T.C.C. #1170 v Glen Grove & Apartments International

Those predated modern AirBnB etc but the objections match ( hotel-like innkeeping /check-ins/check-outs etc ) Those same-building 2001 & 2002 judgments can be tracked down as follows :

Glen Grove at a 2001 Bob Aaron column http://www.aaron.ca/columns/2001-08-18.htm . Aprts Intl follows it at canlii.org.

The Glen Grove transient hotel-like operation - long before AirBnB - is said struck down because

- an upheld valid Rule bars leases shorter than 3 months

- the Declaration is violated by a "transient, hotel-like" operation that increases corporate insurance costs.

( Unknown is whether the unavailable 2001 Zeidan or 2002 texts focussed on some Declaration use restriction probably ‘residential’ INSTEAD OF ‘SINGLE FAMILY” as in Menzies 2016. This was a different judicial focus from the recent Menzies decision / Declarationed definition of 'single family'. )

So Ottawa lawyer Rod Escayola's latest in Ottawa may be a significant NEW judicial event albeit against AirBnB type violations not around in 2001-2

Dec 31/16 ToStar “Ontario court upholds condo rule banning short-term rentals. Ottawa owners breached condo declaration by renting unit out through Airbnb website, reinforcing earlier court case involving Toronto condo”

by B Aaron LLB

https://www.thestar.com/life/homes/2016/12/31/ontario-court-upholds-condo-rule-banning-short-term- rentals.html
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