Several Ontario cities, including Toronto, Ottawa, and Mississauga, have implemented licensing regimes for short-term rentals. These typically require: registration of short-term rental units, proof that the unit is the owner’s principal residence, collection and remittance of Municipal Accommodation Tax (MAT), and compliance with zoning bylaws.
For condo corporations, the implications are clear: failing to regulate short-term rentals within the building may lead to increased conflict with local bylaws, heightened insurance risk, and strain on community resources.
Common Concerns for Condo Corporations
Short-term rentals introduce a range of issues, including:
Security: A steady flow of unfamiliar guests can compromise building safety and increase the risk of theft or unauthorized access.
Wear and tear: Common elements such as lobbies, elevators, and pools may see accelerated deterioration from heavy guest usage.
Noise and nuisance: Weekend parties or late-night disturbances can frustrate full-time residents and erode a sense of community.
Insurance and liability: Some insurance providers may deny coverage or increase premiums if short-term rentals are prevalent or not properly disclosed.
Governance tensions: Investor-owners may oppose restrictions, leading to political divisions within the board and ownership.
Legal Tools and Enforcement Options
Condominium corporations in Ontario have several options to control or prohibit short-term rentals:
Rules: Under the Condominium Act, 1998, corporations can pass rules to promote the safety, security, and welfare of owners and property.
Declaration amendments: Stronger and more permanent restrictions can be embedded in the declaration, but these require 80 per cent owner approval—a higher but more binding threshold.
Enforcement: Boards can issue compliance letters and, if necessary, seek court orders under Section 134 of the Act. Courts have generally upheld well-drafted and properly implemented rules restricting short-term rentals.
Case Law Note
In Ottawa-Carleton Standard Condominium Corporation No. 961 v. Menzies (2016), the Ontario Superior Court of Justice concluded that operating a unit as a hotel-like business through repeated short-term rentals breached the “single family use” provision in the condominium’s declaration and violated a rule prohibiting leases shorter than four months.
Drafting Effective Rules
Effective rules should be:
Clear and enforceable: For example, setting a minimum duration for leases.
Aligned with municipal bylaws: Ensure rules don’t contradict local licensing requirements.
Reasonably justified: Boards should document the rationale for the rule (e.g., increased complaints or insurance issues).
Well-communicated: Inform owners ahead of implementation, and be prepared to address investor concerns.
Communication and Community Engagement
The key to successful implementation is buy-in. Boards should hold virtual or in-person townhall meetings to explain the risks and proposed solutions, share examples of how other buildings have handled the issue, and consider owner surveys to gather input before formalizing rules.
Transparency builds trust—and trust makes enforcement more effective when the time comes. Boards should also be prepared for pushback from owners who rely on short-term rentals for income. In these situations, clear and empathetic communication is essential. Boards can explain that the long-term risks—such as rising insurance premiums, legal liabilities, and community dissatisfaction—ultimately affect everyone. Engaging legal counsel early on can help ensure that rule changes are both effective and legally sound.
Some corporations are also turning to technology to support enforcement. Digital guest registration systems, access control logs, and security camera data can help identify patterns of short-term rental activity. These tools provide boards with objective evidence and can strengthen their ability to take timely, justified action when rules are breached.
Short-term rentals are here to stay, but that doesn’t mean condo corporations must accept instability in their communities. By staying informed, updating governing documents, and engaging owners early, boards can strike a healthy balance between protecting community integrity and respecting owner rights.
Now is the time to review your documents, consult with legal counsel, and ensure your corporation is equipped to meet the challenges of 2025 head-on.
Denise Lash is a principal of the condo law firm of Lash Condo Law and founder of CondoVoter (www.condovoter.com), a virtual meeting and electronic voting provider. Denise writes a weekly blog on condo issues facing our condo communities. For info visit www.lashcondolaw.com
