City to Implement Short-Term Rental By-law

As our readers will know, the City of Ottawa has passed a by-law to regulate short-term rentals. The City’s Short-Term Rental By-law (By-law 2021-104) can be found here.

Very briefly, the City’s by-law says that short-term rentals are only permitted in the renter’s “principal residence” (except in cases of cottages or “Dedicated Short Term Rentals” under the by-law). 

In addition, anyone wishing to operate a short-term rental must first obtain a “host permit” from the City, under the by-law.  

There are also additional requirements and instructions in the by-law, including insurance requirements, requirements in relation to marketing of short-term rentals, requirements for registration of short-term rental platforms, requirements for registration of short-term rental property managers, etc.

The City’s by-law also includes the following key provision for condominium corporations: Under Part V of the by-law, a condominium corporation (or a landlord or a housing co-op) can apply to the City’s Director of By-law and Directory Services to register a prohibition (for short-term rentals). Once registered the City won’t issue any host permits for the particular property (and any host permits issued will be revoked).

The precise process (for condominium corporations) is set out in Section 39 of the City’s by-law, which reads as follows:

Section 39 – Condominium corporations

An authorized representative of a condominium corporation may apply to the Director to register or remove a prohibition relating to short-term rentals by:

  1. a. providing an affidavit or a declaration confirming that the prohibition is in effect and including the following, as may be applicable:
    • a copy of the relevant condominium declaration, as registered in the Registry of Land Titles Office; or
    • a copy of the relevant by-law of the condominium corporation (as registered in the Registry of Land Titles Office) and evidence satisfactory to the Director that the condominium by-law has been approved by the majority of the owners; or,
    • a copy of the relevant condominium rule and evidence satisfactory to the Director that the rule has come into full force and effect in accordance with the Condominium Act and that it is still in force; and,
    • the municipal address of each residential unit where short-term rentals are prohibited.
  2. (b) providing any other information required by the Director for the purposes of registering or removing a prohibition; and,
  3. (c) providing payment in full of the applicable fee set out in Schedule “A”. [Editorial Note: the current fee is $57 + $5 per residential unit.]

The City will begin implementing the by-law on April 1, 2022. Based on our review of the City website, it appears that condominiums interested in registering can reach out to the Business Licensing Centre to set up an appointment. More details can be found here. We can of course assist with this process, upon request.

In my view, it’s not necessary to register a prohibition with the City in order to enforce a short-term rental prohibition (in the condominium’s Declaration, By-laws or Rules). Condominium corporations can still take the usual enforcement steps under the Condominium Act. However, the advantage is that this registration process may be the easiest and most efficient way to prevent violations and avoid having to take other enforcement measures, i.e. by taking advantage of the City’s enforcement procedures.

That said, I do have the following concern: Many condominiums permit short-term rentals, but subject to important limits or restrictions. As such, many condominiums don’t have an absolute prohibition of short-term rentals. In those cases, the City may or may not be willing to grant the prohibition (and this may depend upon the precise wording of the particular provision in the condominium’s governing documents).

A further note, under the City’s by-law, a short-term rental is defined as follows:

“short-term rental” means transient accommodation in the whole or part of a residential unit for a period of less than thirty (30) consecutive nights, and:

  1. is marketed or brokered by a short-term rental platform;
  2. is not a rooming house or hotel; and,
  3. includes a bed and breakfast, a cottage rental, and a Dedicated Short-Term Rental as defined in this by-law.

As you can see, the City’s by-law (and any prohibition under the City’s by-law) will only apply to short-term rentals which are “marketed or brokered by a short-term rental platform” (such as Airbnb or similar website or digital platforms). The by-law defines short-term rental platform as follows:

“short-term rental platform” means any person who, for compensation, markets or brokers the booking, reservation, rental or listing of a short-term rental on behalf of a host by means of a website or digital application.

A short-term rental provision in a condominium’s governing documents may well prohibit all short-term rentals whether or not a short-term rental platform is involved. The point is that a prohibition under the City’s by-law may not stop all short-term rentals in a condominium and a condominium corporation might therefore still need to take its own enforcement measures in some cases.

Accordingly, enforcement of the By-law begins effective April 1, 2022, and condominiums may wish to take steps now to apply to be included on the City’s prohibition list for short-term rentals.