So… You Want to Buy an Airbnb Friendly Condo in Vancouver?
Short term rentals are defined as any rental period of less than 30 days. Most strata corporations in Vancouver have both rental restriction bylaws and short-term accommodation bylaws. Rental restriction bylaws can limit both the length of the rental period and number of overall units that are permitted as rentals. Short-term rental (or short-term accommodation) bylaws can limit or entirely ban short-term rentals (STR’s).
Here’s the top 5 things you need to know if plan to use your home as an Airbnb or other short term rental in Vancouver:
1.) It HAS to be your primary residence.
The City of Vancouver’s stance on allowing short term rentals came from the standpoint of increasing affordability for legitimate residents and owners. Through short term rentals, an owner or tenant is able to offset the high cost of housing by renting their primary residence out while not in use. If Vancouver didn’t have the primary residence clause, potentially more condo units could be repurposed from traditional rental or owner occupied to purely “hotel-like accommodation” geared toward investors. This would increase prices and would have implications on already low inventory levels.
2.) If you’re going to use it as a STR, you will need the strata council’s written approval.
To legally operate a STR in Vancouver you need a business license. In order to get that you will need written permission from the strata corporation stating they will allow a STR in your unit. If the unit is tenanted, the tenant may use their unit as a STR providing they have written permission from both their landlord and the strata corporation.
3.) Your neighbours are watching
Strata corporations and owners are generally quite vigilant on reporting illegal or nuisance airbnb’s to the city and their strata council. Unruly airbnb guests may not respect quiet hours, damage common property and cause other disturbances to residents. It’s up to the owner (aka host) to make sure their guests are complying with the all the strata bylaws and rules. If you plan to provide short term accommodation in your unit, be aware that you may be subject to fines if any strata bylaws or city bylaws are broken. Strata corporations may elect to fine up to $1,000 for illegal airbnb’s (every 7 days for a continuing contravention) and up to $200 for any other one time violation (excessive noise, improper garbage disposal etc.). The city also has a schedule of hefty bylaw violation fines they can impose at their discretion.
4.) Know the risk: strata bylaws can change at any time with a ¾ owners vote…
If you’re buying an Airbnb friendly condo now, it may not necessarily be Airbnb friendly in the future. There is no grandfathering of short term accommodations if at any point the strata changes their position. Find out what the vibe is from the residents on how they feel about Airbnb/Vrbo in their building. If there is enough of a divide, there will likely be proposed bylaw changes in the future and in the interim some turbidity amongst owners, renters and hosts.
5.) The building’s strata insurance may be impacted due to STR’s
This is a relatively new development that has impacted some strata corps in Vancouver. Upon the strata corporation's annual insurance renewal underwriters are now asking for details on the status and impact of short term accommodation within the building. It is not uncommon for the insurance company to ask for: the number of STR units and the exact bylaw wording that restricts or limits STR. The underwriters take into account the building's overall claim history and assess the added insurance risk of short term accommodation. If that risk is too high, there is a possibility that insurance renewal may be denied until STRs are either prohibited or stronger bylaws are implemented. This poses a huge risk to the strata corporation and can leave a strata scrambling to find adequate insurance, risk being underinsured or having to turn to alternative insurers at a premium.
To recap, if you are thinking of purchasing a condo that currently allows short term accommodation - it is important to understand how the above implications could have an effect on your investment. If you would like guidance on short term rental friendly buildings in Vancouver please feel free to reach me directly at 604-897-6971. Alternatively, hit the link below to be automatically signed up for daily downtown Vancouver STR listing alerts.
