Shuswap strata sues for $30,000 over short-term rentals
A Shuswap strata that sued for $30,000 over condos used as short-term rentals has been awarded just $400 after a Tribunal found that the only fines valid were because guests hung towels on the balcony and slammed a door.
The Sicamous strata had wanted Applewood Holdings, which own two condos in the eight-storey complex on Mara Lake, to pay $30,800 to cover $2,800 in bylaw fines and $28,000 as a "penalty" for additional wear and tear from contractors using the parking lot with studded tires.
Strata EPS104 argued if the Tribunal wouldn't accept the parking lot damage argument then a $28,000 "penalty" should be ordered as disgorgement of profits Applewood Holdings made renting their units as short-term rentals.
It's unclear which party initiated the legal proceedings but the issue was taken to the BC Civil Resolution Tribunal.
In the May 29 decision, Applewood Holdings argued the strata should wipe $2,800 in bylaws fines, order that short-term rentals are not prohibited in the building and that the strata stop interfering with its guests’ parking rights.
While the issue of whether short-term rentals are allowed or not would appear to be straightforward, the Tribunal ruled that just because the Strata doesn't have a bylaw explicitly restricting them doesn't mean that they are allowed.
The decision said a recent municipal zoning change specified that the building must support short-term rentals with owners obtaining a business license from city hall.
However, the Strata refused to sign Applewood Holdings' application for a business licence, meaning the company couldn't complete its application at city hall.
The Strata then levied fines under its bylaw for "illegal use" of a condo.
Applewood Holdings argued it was "significantly unfair" for the Strata to refuse to sign the short-term rental consent form.
However, the Tribunal disagreed.
"Simply because bylaws were silent on regulating short-term (rentals), that (does) not mean the strata had to approve and facilitate them," the Tribunal ruled.
The Tribunal found it was "unreasonable" for Applewood Holdings to expect the strata to sign the consent form without "considering the potential effects of that decision" noting that short-term rentals had been "polarizing" at the condo building.
The Tribunal ruled that Applewood Holdings had breached the Strata's bylaws by using its condos as short-term rentals which was an "illegal use" of a unit because it didn't have a municipal business licence.
While Applewood Holdings wanted the Tribunal to order the Strata to allow short-term rentals, the Tribunal refused stating the strata's bylaw prohibited them as the "primary" use of a condo.
READ MORE: B.C. condo owner wins case against strata over Airbnb rules
Somewhat confusingly, and because the municipal zoning allows for short-term rentals, the Tribunal noted that this ruling doesn't apply to short-term rentals as a "secondary" use of a condo unit in the building.
While the Strata had wanted Applewood Holdings to cough up $2,400 for the bylaw fines, the Tribunal ruled that all but two of the fines hadn't followed the correct protocol when being issued.
The Tribunal found that only fines issued for hanging towels on the balcony and a noise complaint about a slamming door had followed the correct procedure and ruled Applewood Holdings was on the hook for $400.
While the Strata had wanted a $28,000 "penalty" imposed, the Tribunal again found it hadn't followed the correct requirements to issue such a fine, nor had it proved that contractors damaged the floor.
READ MORE: BC strata's Airbnb rule invalid; owner off the hook $30,000
The Strata claim for $28,000 to remedy profits made as a result of illegal or wrongful conduct also didn't go down well.
"There is no evidence the $28,000 bears any relation to Applewood’s (short-term rental) profits," the Tribunal ruled.
Ultimately, the Tribunal ordered Applewood Holdings to pay the Strata $400, not the $31,000 it had wanted.
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