While the short-term, hotel-type rental industry appears to be concentrated in Toronto's downtown core, condominiums and their residents are impacted anywhere the demand for short-term rentals exists.   In addition to business travellers, units are rented to vacationers, to individuals hosting social events, and the like.   Business corporations are also renting units on long-term leases, only to make the units available for their employees as needed for regular short-term stays.

On September 15, 2001, the Toronto Star published an article entitled "Condo or Hotel" which focused upon the use of condominium units for the purpose of providing short-term, commercial, hotel-like accommodation.  

It should be noted that the Toronto Star article misstated Madam Justice Molloy in the Metropole decision by stating that the short term use of units did not contravene the "private single family dwelling" restriction.   In actuality, she held that the use did not contravene the Metopole's declaration.   The critical distinction is that the Metropole's declaration was less restrictive and only restricted the use of dwelling units to those uses permitted by city by-laws.   The relevant city by-laws did not prohibit short-term rentals.   The Metropole's declaration did not include the specific words: "single family" or "private single family" in restricting the use of units.  

More recently, a case was released involving MTCC 1280 . In that case, Madam Justice MacDonald adopted the reasoning in earlier caselaw in prohibiting short-term rentals.   However, Madame Justice MacDonald went further by (1) clarifying the phrase "private-single-family-dwelling" to mean either "owner-occupied" or "long-term residential" tenancy, and , (2) holding that use of condominium units for short-term occupancy is inconsistent with "private-single-family use". This case is currently being appealed.

To many directors and unit owners, it is inconceivable that the phrase "private-single-family-use" could possibly be interpreted to permit short-term, hotel-like rentals.   In newer condominiums where short-term rentals are contemplated prior to construction, it has become common practice among developers to draft declarations, which not only permit the short-term rental of units, but expressly prohibit the passing of any rules which would in any way limit the use of units as such.

The following excerpt from the MTCC 1280 decision is noteworthy because it highlights the dichotomy of interests between long term residents and transient residents:

"It is not unreasonable for owners to say that the recreational facilities are less inviting when they run the risk of encountering absolute strangers. Nor is it unreasonable for them to say that the transient occupants treat the facilities as if they belong to a hotel. They have no interest in long-term upkeep, maintenance and repair. They do not know the rules and have no vested interest as do owners and long-term residents in abiding by them."

The condominium documents - the declaration, by-laws and rules - contemplate a particular lifestyle.   While the MTCC 1280 decision may not be the end of this issue, purchasers of condominium units must read and understand the condominium documents before committing to the purchase.