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British Columbia Ruling upholds Vancouver strata corporation’s right to limit condo rentals

The downtown skyline and cranes at Port Metro Vancouver are seen in the distance behind houses in east Vancouver, B.C., on Wednesday September 23, 2015.

DARRYL DYCK/The Globe and Mail

The British Columbia Court of Appeal has upheld the right of a Vancouver strata corporation to limit rentals to just a single unit in a tower of 158 apartments.

The ruling on Friday states that the strata council of Hycroft Towers in Vancouver's South Granville neighbourhood can restrict its owners from renting out their suites – without explaining why – because anyone who feels they have been treated unfairly can take their case to the B.C. Supreme Court.

The dismissal of the appeal reinforces the right of strata councils to stop rentals in their buildings, a tactic that experts say might be creating more pressure on the region's extremely tight rental market.

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The case centred around a family that began renting out one of the three units they owned at Hycroft Towers last September – despite an earlier rejection of their application to expand the rental pool in the building by the strata council.

The family argued that, under the province's strata laws, the council must also provide the criteria by which it grants permission for owners to rent their units.

However, Justice Gregory James Fitch ruled that it is "difficult to imagine that an acceptable screening criteria for administering the rent restriction cap [such as the 'needs-based' system proposed by the appellants] could be devised that would comply with [provincial law]."

He added, "By default, adoption of a wait list is, practically speaking, the only permissible way of administering the limit that is open to a strata corporation."

Politicians and experts are searching for tools that could help Metro Vancouver renters, who are competing for units amid historically low vacancy rates that are near zero in most communities.

Tom Davidoff, a University of British Columbia economist, said once Vancouver's vacancy tax comes online, it could unfairly penalize certain owners who are banned by their strata councils from renting their homes.

In the wake of a Vancouver study that found 10,800 homes – almost all of them condominiums – were vacant in 2014 for at least one year – Mayor Gregor Robertson said the province might be able to reduce that number by amending the Strata Act. His staff recommended that developers could be forced to obtain 100-per-cent support – not 75 – from owners before changing the number of lots that may be rented out.

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But Premier Christy Clark has said she is reluctant to force strata councils into accepting unwanted rentals, and courts have generally sided with these bodies in disputes with owners who want to rent out their units.

Both the City of Vancouver's study on empty homes and recent data from the condo owners' trade association showed that the condo units most likely to be left vacant the majority of the year tend to be in newer, denser developments

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