Condo Bylaws validly prohibit Airbnb-style short-term rentals

Authors: Jerritt R. Pawlyk, Partner, Megan B. Harris, Student-at-Law, and Victoria C. Lee, Associate

On February 27, 2020, the Honourable Justice R. Paul Belzil released his decision in Condominium Corporation No. 042 5177 v Kuzio, 2020 ABQB 152 (“Kuzio”), which affirmed condominium corporations’ authority to prohibit condominium owners’ short-term, Airbnb-style rentals.

In Kuzio, the Board of Directors of the condominium corporation at Ten Lofts Condominiums in Edmonton (the “Condo Corp”) became aware of unit owners listing their condominiums on short-term rental websites, such as Airbnb. For the purposes of these short-term rentals, the unit owners did not enter into leases with the renters.

The Condo Corp responded by issuing letters to specific unit owners, advising that the short-term rentals violated the Bylaws of the Corporation. The Condo Corp then obtained an Interim Injunction, to prevent the unit owners from engaging in the short-term rentals.

Subsequently, the Condo Corp brought an application for a permanent injunction and a court declaration that its Bylaws, which prohibited unit owners from operating Airbnb-like accommodations in units, were valid.

Ultimately, the Court granted the permanent injunction and found the unit owners in violation of the Bylaws. In the course of the ruling, the Court reached the following conclusions:

1. When an individual rents a condominium unit from a web based platform such as an Airbnb, he/she is a licensee rather than a lessee;
2. Section 32(5) of the Condominium Property Act does not apply to the short-term licensing of condominium units;
3. Condominium corporations are permitted to prohibit short-term rentals of owners’ units; and
4. In this particular case, the Condo Corp’s Bylaws validly prohibited unit owners from operating Airbnb-style accommodations. Therefore, the unit owners were in violation of the Bylaws.

In sum, condominium corporations in Alberta may validly prohibit short-term, Airbnb-style rentals via their bylaws, where the renters are licensees rather than lessees.