Airbnb Legal In Your Condo? Here’s What You Need To Lookout For

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The popularity of Airbnb.com and other short-term accommodation rentals booked through “home sharing” websites is growing. Meanwhile, condo associations across North America battle against the trend to protect their communities from a revolving door of Airbnb renters. While condo boards take steps to control how owners are allowed to rent out units, it’s important to keep the lines of communication open in a way that is beneficial to all community stakeholders.

Last December, Ontario’s Superior Court ruled that condominium corporations with a “single family use” provision (i.e., for residential purposes and not for hotel-like business) in the condo’s “declaration” have the authority to ban unit owners from renting out their properties on services such as Airbnb.

This ruling could be a game-changer for condo communities dealing with short-term rental issues, as other jurisdictions study the reasoning and apply it to their own.

Whatever happens in the aftermath of the court decision, the fact remains that Airbnb adds another layer of complexity to a lifestyle already beset with the complications of shared ownership and close community living.

If your condominium corporation is one that indeed allows Airbnb, beyond the hassles of dealing with a continuous stream of strangers taking up temporary residence, there are other aspects to consider. We’ve identified five topics that owners, residents, community managers, and board members should be mindful of:

Safety is an issue.

Renters in shared living spaces have access to common areas like a gym, swimming pool, parking garage, or rooftop. Airbnb guests, however, don’t pay fees for maintaining these areas and have little incentive (beyond common decency) to avoid misuse. Some owners may feel threatened with strangers, who are typically unaware of the rules, using their space. If Airbnb hosts are tolerated in your community the board should make sure rules for using amenities and common areas are posted in the unit(s) being rented to short-term guests.

Keep a clear, simple line of communication.

It’s important to be able to notify people in the community about problems or maintenance requirements. For example, if there’s a scheduled repair to the pool, or the hallway carpets are being cleaned, residents should know about it. Evercondo’s bulletin feature, which is accessible online or via mobile app, helps keep everyone in the community updated. Airbnb hosts included.

Insurance coverage should be checked.

Are Airbnb renters covered under your community’s master insurance policy? What happens when a renter decides to jump off the building? It pays to check into who is responsible for damages to common areas by Airbnb renters. Also, if a Airbnb renter gets injured (for example in a slip and fall) in a common area of the building, the condo association could be liable if short-term renters are not covered under the policy.

Noise complaints may escalate.

Often, renters who use Airbnb are on vacation, which means they may be up partying late or playing loud music in the unit. If such activities are subject to fines, be prepared to leverage them on unit owners who are Airbnb hosts—the tenants will be long gone once the fine is issued.

Get the community on board.

If you feel the risks of Airbnb renters are outweighed by the financial benefits they bring to owners, it’s a good idea to amend your bylaws to reflect this position. Have an open discussion with owners about allowing properties to be listed on Airbnb.com and other short-term rental websites. Amendments may include conditions that owners must follow when renting out their units (for example limiting the number of days a unit can be rented out) and require owners to meet the renters in person, as well as creating a list of rules about use of common areas.

Does your condo community allow Airbnb renters? How do you manage issues related to having short-term tenants? Share your stories in the comments. We’d love to hear from you!

Evercondo the leading web and mobile platform that facilitates quick, useful communication between property managers, the condo association or HOA board, and residents. Contact us for a demonstration or a free trial to see how we can keep your communities happy.

Why Directors and Officers (D&O) Insurance Is A Must For Homeowner Associations

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Did you know that volunteering as a board member for your condo or HOA could jeopardize your personal financial security? You’re actually at risk from lawsuits against the board—whether they have merit or not. Having an indemnification clause in your bylaws helps protect directors financially but at a greater potential cost to the condo association than a comprehensive Directors and Officers (D&O) liability insurance policy.

It may not seem fair that being a volunteer director of your condo or HOA board comes with the potential for financial ruin. But it’s a very real risk—there are many cases where directors have been found personally liable for board decisions and required to pay expensive legal costs as a result.

One example from Ottawa, Ontario is the case Boily vs. Carleton Condominium Corporation 145, where a number of unit owners sued the board over repairs to a parking garage that resulted in “substantial changes” being made to the courtyard area. The Ontario Superior Court of Justice awarded in favour of the owners (a decision later upheld by the Ontario Court of Appeal); the directors were found in contempt of court and personally liable for more than $95,000 in legal costs.

Being a director is a somewhat thankless job that comes with big responsibilities. You have a legal duty to protect owners and their investment in the property. And if the board is not covered by the right liability insurance, you are at risk if the board is sued. No matter how frivolous a lawsuit might be, you are required by law to hire an attorney (with your own money) to defend your actions as a director.

Typical lawsuits that plague condo and HOA boards include:

  • Wrongful termination of an employee
  • Discrimination due to race, religion, sex, or disability
  • Defamation of character (i.e. libel or slander)
  • Breach of contract by a third-party vendor
  • Renovations by the building or homeowner
  • Noise by another homeowner, a contractor, or the building’s machinery
  • Subletting guidelines and restrictions
  • Pet guidelines and restrictions

While an indemnification clause in the bylaws will require the condo association to reimburse directors for uninsured legal fees incurred in their capacity as board members, it can become expensive if the board is sued.

On the other hand, a comprehensive D&O liability insurance policy can be a budget line item that pays for itself in the event of a lawsuit.

“Comprehensive” means that the policy stands on its own—it’s not D&O liability coverage that’s embedded into the property’s commercial insurance or general liability policy. This is important because a comprehensive policy provides coverage for elected or appointed directors, trustees, officers, employees, committee members, and volunteers now or in the past. But the embedded policy usually just covers the directors and officers in office during the policy period.

To protect yourself as a board member, make sure to consult the association’s insurance broker to see if the liability coverage can withstand a legal assault.

Do you have any experience with lawsuits as a condo/HOA owner or board member? Share your story in the comments below!

Evercondo the leading web and mobile platform that facilitates quick, useful communication between property managers, the condo association or HOA board, and residents. Contact us for a demonstration or a free trial to see how we can keep your communities happy.

Ontario’s New Condo Law Reforms Recap 2016

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It’s a big topic, there’s a lot to digest, it’s somewhat hazy and a lot has happened. Like a big puzzle of 100,000 pieces, it’s hard to put the pieces together. Here’s a quick recap to help you stay updated on what has happened over the past year.

Ontario’s updated condominium ownership legislation (otherwise known as Bill 106) was passed in December 2015. One year later the bill’s provisions have yet to be enacted—but condo directors and managers in Ontario should prepare for changes coming in the summer of 2017.

If you haven’t been following the news, here are our past articles that can get you up to speed with the new act:

Till our next update on the new condo act, here are some table talk points that may come in handy during discussions:

Which “letters of the law” are changing

The Protecting Condominium Owners Act will reform (not replace) the existing Condominium Act. It will also introduce the Condominium Management Services Act and establish two administrative authorities—the Condominium Authority of Ontario (CAO) and the Condominium Management Regulatory Authority of Ontario (CMRAO). Read this Condo Business news article for more details about the condo law reforms.

The purpose of the new legislation

The new law will help ensure the sustainability of healthy condo communities. The act’s core commitments include better protection from unexpected costs for buyers of new condos; establishing a Condominium Authority to resolve disputes more quickly at less cost; improving condo governance with training for directors; strengthening rules to prevent financial mismanagement; and introducing mandatory licensing and education requirements for condo managers.

There’s a transition plan

The thing about legislation is that it takes time to draft up new rules and regulations. Fortunately the new law’s regulations will have provisions to smooth compliance during the transition period. Premier Kathleen Wynne has set a Fall 2017 deadline for implementing “key elements” of the Protecting Condominium Owners Act. And while the government finishes writing up the legal details and works to establish the new bureaucratic framework, Ontario’s existing Condominium Act remains in force.

Evercondo the leading web and mobile platform that facilitates quick, useful communication between property managers, the condo association or HOA board, and residents. Contact us for a demonstration or a free trial to see how we can keep your communities happy.

10 Ways to Prepare for the Ontario Condominium Act

ontario condominium actChange is coming. The Ontario Condominium Act, which is expected to go into law at the end of 2016, will bring fundamental change to the way condos in Ontario are governed.

Bill 106, also know as the Protecting Condominium Owners Act, 2015, is a groundbreaking set of laws. It is being hailed as one of the most advanced laws regarding condominium governance anywhere in the world.

So often, though, laws are enacted, and don’t have any real consequence for most of us. The Ontario Condominium Act is different; it offers legal protection to condo owners and is written with modern realities in mind.

Here are 10 actions the Ontario Condominium Act will put in place to change condo governance, and how you can prepare for the coming changes.

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Introduction to the 2015 Condominium Act (Ontario) Reform: Major Changes Coming

Introduction to the 2015 Condominium Act (Ontario) Reform: Major Changes Coming and How It Alters the Toronto Condo Landscape

Photo via urbantoronto.ca

If you’re involved in the Ontario condominium industry or even passively follow news with regards to it, chances are that you’re aware there will be a significant reform of the Condominium Act, 1998 (the “Act”), which essentially governs condo communities across the province. A refresh of the Act has been long overdue as there is a dire need for it to reflect today’s realities.

A Whole New World

Before addressing the major changes coming to the Act, context is required. The Act came into force in 2001, where the condo landscape was merely at the tip of what it is today. While the intense growth of the condo market is shared across the board in many North American cities, no other city has rivaled the explosive growth of Toronto’s landscape during the same period.

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