Short-Term Rentals & Condominiums: What Boards & Owners Need to Know
The rise of short-term rentals (STRs) through platforms like Airbnb and Vrbo has significantly impacted condominium communities across Canada. While these services provide owners with income opportunities, they also introduce risks, legal complexities, and financial considerations for condominium corporations.
We recently hosted a webinar with condominium experts: Dionne Levesque with SVR Lawyers LLP and Kyla McAvena & Chris Low with BFL Canada. Together, we explored key issues related to short-term rentals in Calgary, focusing on insurance implications, legal precedents, and evolving municipal regulations. Whether you’re a condominium board member, landlord, or considering applying for a short-term rental license, this guide will help you navigate the landscape.
Understanding the Insurance & Financial Risks of STRs
One of the most pressing concerns for condominium corporations is how STRs impact insurance coverage and costs.
How Insurance Responds to STR-Related Incidents
Under Alberta’s Condominium Property Act, the condominium corporation insurance is the primary respondent, meaning the corporation’s insurance is the first to respond in the case of a loss. If an STR leads to damage or liability claims, the corporation’s insurance steps in—even if the unit owner caused the issue.
For example, consider a scenario where:
- A short-term guest hosts a party, and an invitee falls and gets injured.
- The injured person sues the unit owner, the guest, and the condominium corporation.
- The corporation’s insurance may have to respond first, affecting future premiums and deductibles.
Key takeaways:
✔ STR-related claims could increase insurance costs for all owners.
✔ More frequent claims may lead to higher deductibles and premium hikes.
✔ Boards can assess up to $50,000 of the deductible back to the unit owner responsible for the claim.
✔ Its important to review your bylaws with your Insurer and lawyer to make sure that your Corporation is covered.
Risk Mitigation Strategies for STRs
To minimize risks, condominium boards should:
- Clearly communicate policies and expectations to all unit owners.
- Implement risk mitigation strategies
- Review your bylaws with a lawyer to ensure they are updated and aligned with your condominium communities position on STRs.
Legal Landscape: Can Condo Boards Ban STRs?
A significant legal question is whether condominium corporations can restrict or prohibit short-term rentals through bylaws. The Alberta courts have provided guidance in multiple cases:
Case 1: Scott (2015)
- The court ruled that condominiums cannot prohibit leasing outright, citing Section 32(5) of the Condominium Property Act.
- However, this doesn’t mean condos must allow STRs—they can still regulate how units are rented.
Case 2: Kuzio (2019)
- A downtown Edmonton condominium had bylaws stating units must be used as “one-family residences.”
- The court ruled STRs function like hotel stays (with check-ins, cleaning fees, and security deposits) and violate single-family use bylaws.
- Outcome: The condo board successfully prohibited STRs.
Case 3: Kuzio #3 (Porter)
- The owner attempted to bypass the ruling by creating monthly lease agreements for Airbnb guests.
- The court rejected this approach, ruling the lease was actually a license for short-term occupancy.
Key Takeaways:
✔ If a condominium’s bylaws prohibit commercial use or require single-family use, STRs may be restricted.
✔ Simply calling an Airbnb stay a “lease” doesn’t override condo bylaws.
🔹 Reminder: The legal landscape is always changing. Regardless of your position on short-term rentals, it is best to check with your lawyer to ensure your bylaws are up to date and enforceable. Regulations and case law continue to evolve, impacting how condo boards and owners navigate STR policies.
City of Calgary’s New STR Rules (Effective April 2025)
The City of Calgary recently updated its short-term rental regulations, with significant changes taking effect on April 1, 2025:
🔹 Two license categories:
- Primary residence STR: Owner lives in the unit and rents it occasionally.
- Non-primary residence STR: A full-time rental property.
🔹 New licensing restrictions:
- A moratorium on non-primary residence STRs if Calgary’s vacancy rate drops below 2.5%.
- STR platforms (like Airbnb) must pay an annual $3,000 fee and submit a list of Calgary STRs each month.
- $1,000 fines for non-compliance.
- STR licenses will not be issued for units in affordable housing programs.
- Condo board consent requirement has been removed, making it unclear how enforcement will work within condo communities.
What Condo Boards & Owners Should Watch For
With STR rules evolving, condominium boards and owners must stay informed. Key questions to consider:
✔ Can your condo board legally restrict STRs? Check your bylaws to see if restrictions are already in place or need updating.
✔ Does your insurance cover STR-related incidents? Many personal insurance policies exclude STR use—special coverage may be required.
✔ Will city enforcement impact your condo building? With the removal of board consent requirements, how will violations be addressed?
✔ What happens if you’ve allowed STRs but bylaws restrict them? Boards may need to act quickly to update policies.
Final Thoughts
The short-term rental market in Calgary is undergoing significant regulatory changes, impacting condominium boards, landlords, and investors. Understanding insurance risks, legal rulings, and new city rules is crucial for making informed decisions.
📢 Next Steps:
- If you’re a condo board member, consider reviewing and updating your bylaws.
- If you’re a landlord, ensure your property is properly insured and licensed.
- If you’re considering an STR, stay up to date with Calgary’s new licensing rules.
For more expert insights on short-term rentals and condominium governance, watch our full webinar on YouTube or contact us for personalized guidance.
About SVR Lawyers
SVR Lawyers is a leading condominium law firm specializing in legal matters affecting condominium corporations, boards, and owners. Our team provides expert advice on governance, bylaw enforcement, and legal strategies to ensure compliance with Alberta’s evolving condominium legislation.
📍 Calgary Office | 1500, 222 3 Avenue SW, Calgary, AB T2P 0B4
📧 Website | 📞 1.877.505.5651
About BFL Canada
BFL CANADA is one of the largest independent insurance brokerage firms in Canada, specializing in risk management for condominium corporations and property owners. With over 1,100 employees and 24 offices across the country, BFL Canada provides tailored insurance solutions to help protect properties and minimize financial risk.
About Emerald Management & Realty Ltd.
Emerald Management & Realty Ltd. has been a trusted name in property management for over 50 years, offering licensed condominium management services tailored to the unique needs of board members, owners, and investors. Our team is dedicated to maintaining strong governance, financial integrity, and seamless communication for condominium corporations.
Emerald Management & Realty Ltd. currently provides licensed property management & condominium management services to: Airdrie, Calgary, Canmore, Okotoks, Lethbridge, Strathmore & Area.
📍 Calgary Office | 1036 – 10 Avenue SW, Calgary, AB T2R 1M4
📧 Website | 📞 1-403-237-8600
