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Rental Restricted Or Not ??

Blog by Marcie Panah BSc, MA Personal Real Estate Corporation | January 11th, 2017

When it comes to rental restrictions, two factors comes into play, either a strata corporation passed bylaw or a developer filed Rental Disclosure Statement. A bylaw may either prohibit rentals of residential strata units or limit the number or percentage of residential strata units that may be rented or limit the period of time for which they may be rented.  A Rental Disclosure Statement on the other hand is filed by a developer before any strata lots are offered for sale and indicates which strata lots are designated as rental strata lots and the rental period. In most cases the developer will identify all strata lots in the development as rental strata lots on the Rental Disclosure Statement.  The rental bylaw would not apply to that strata lot until the Rental Disclosure Statement expired or the strata lot was sold, whichever happened first.

Until recently, the general rule has been, if the buyer bought a strata lot from the developer and the developer had filed a Rental Disclosure Statement that identified that strata lot as being intended for rent, and the Rental Disclosure Statement had not expired, the buyer was entitled to rent that strata lot notwithstanding a rental bylaw. The Strata Property Act have however changed the general rule. For all developments for which the Rental Disclosure Statement was filed on or after January 1, 2010, a rental bylaw passed by a strata corporation does not apply to a strata lot identified in the Rental Disclosure Statement until the expiry of the Rental Disclosure Statement.

If a strata corporation passes a bylaw restricting rentals under the Strata Property Act, the date the rental restriction applies may vary from strata lot to strata lot. Where a strata corporation passes a rental restriction bylaw, there is a grace period of one year before the bylaw applies to any of the residential strata lots in the strata plan. If a tenant occupies a strata lot on the day that the bylaw is passed, the one year grace period for that strata lot starts to run when the tenant vacates the unit. Rental restriction bylaws do not apply to family members, who are defined to include a spouse, a spouse arising from a marriage-like relationship that has lasted at least two years, a parent or child of the owner, or a parent or child of the spouse. Additionally, if the developer filed a Rental Disclosure Statement that applies to the residential strata lot under consideration, depending on the year that the Rental Disclosure Statement was filed, the rental restriction bylaw may not apply to that strata lot if the Rental Disclosure Statement continues to be valid.

It is useful to know that only bylaw amendments need be filed at the Land Title Office so in order to determine the current bylaws of the strata corporation it may be necessary to obtain all filed bylaw amendments, as well as the Schedule of Standard Bylaws. Also, sections may have their own bylaws that are separate from the strata corporation bylaws.  It’s wise to research on a property’s rental restrictions before making a decision.