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Linda Palfi
CNC Properties
47033 Creekside, Calgary, Alberta
P: 403-998-7732
F: 403-592-8002
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Can condo buildings restrict renters?

 

When people shop for a condo apartment or townhouse home, they may worry that a development they are buying into has some suites occupied by renters, as opposed to being entirely owner-occupied. While I also want to avoid a predominantly rental condominium building, Alberta law guarantees the right of condo owners to rent out their property, so there will always be some homes rented out in every condo development.

 

As loyal readers will know, I am of the opinion that well-led and managed condo buildings have very few issues with the behavior of residents, regardless of whether those residents are owners or tenants. Condo Boards have vast authority to regulate behavior, extending even to the authority to evict not only tenants over the objection of a landlord, but even to the option as a last resort of evicting an owner! With authority like that, there's no excuse for a condo building or a townhouse development to suffer unacceptable noise, parties or other disruptions. Simple leadership and enforcement from a Board, assisted by its property manager, should always resolve those issues when they arise.

 

In my own experience, in fact, tenants in condo suites---as opposed to rental apartment buildings---behave well from the outset. They've always known that there are condo bylaws they must follow and that owners who are on the building's Board are resident eyes and ears that seemingly never sleep. Most condo developments require tenants to sign a statement agreeing to abide by bylaws and additional "house rules". Most also require landlords to post a one-month's-rent damage deposit to cover any damage to the common property by their tenants. Landlords also are usually informed that under Alberta's Condo Property Act a transgression by a tenant is deemed to have been committed by the owner. In short, both tenants and their landlords in condo buildings are highly motivated to behave well.

 

There are condo developments that would rather not bother with all this, and seek to simply ban the rental of homes, but under the Act such a restriction is not allowed. In Alberta (unlike in B.C.) every condominium owner is always permitted to rent out their property, although a variety of limitations and restrictions may apply. The condo Board can, as noted above, require a damage deposit from the suite owner, require tenants to sign a statement, and can limit the rental of parking stalls to residents within the building. Some buildings demand to vet tenant applicants before approval, and although I wonder if that would stand up to a court challenge, landlords usually cooperate with it. I suppose that if a condo Board keeps out a tenant with some gang affiliation, found out through its network of Directors of other buildings and of property managers, the landlord will be happy to go along.

 

According to Canada Mortgage and Housing Corporation ("CMHC"), about 21% of Calgary's condominium homes are rented out to someone else by their owners, or roughly one in five. That figure will vary a lot between condo developments. It makes sense that investors focus on more affordable properties in central locations, so generally the more modest a condo development is, and the more central or closer to transit, the larger the number of rental residents there will be. The most luxurious of condo buildings and townhouse developments often have few rented-out suites, which only happens when an owner is transferred by their employer for a term assignment.

 

Alberta condominium buildings can certainly regulate and oversee the renting out of homes within a development, although they cannot prohibit it. Good condo Board leadership and good property management combined with professional landlord practices result in good tenants who behave well and who are indistinguishable from owners in the building. Prospective buyers of condo homes should watch for developments that are less well run and that become disproportionately renter-occupied. Condo-specialist Realtors will already know of such buildings and show you better and well-run alternatives where the few tenant residents are as well behaved as the owner residents.

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