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February 16, 2006

The Rental of Residential Units in a Condominium

Ana and Marc Bateman

Many condominium owners may at some point have the occasion to rent or lease out their condominium unit(s). The Alberta Condominium Property Act ensures that by-laws cannot restrict an owner from renting or leasing out their residential unit.

The Act states that no condominium bylaw may operate to prohibit or restrict the devolution of units, or any transfer, lease, mortgage or any other dealing with them; or to destroy or modify any easement implied or created by the Act.

There are however requirements regarding the rental or leasing of residential condominium units that condominium owners should be aware of. One such requirement is the unit owner’s obligation to give the corporation written notice of their intent to rent a unit, prior to actually renting or leasing it. The Act specifies that a unit owner is required to advise the Board of their address for service as well as the amount of the monthly rent that will be charged for the unit.

When an owner rents or leases a residential condominium unit, it is a condition of that tenancy, that the tenant(s), resident(s), or guests do not cause damage to the common property or contravene any of the corporation’s by-laws.

The condominium corporation may require an owner who rents or leases a unit to pay and maintain with the corporation a deposit that may be used for the repairs or replacement to the common property for damage resulting from person(s) residing in the unit or their guest(s). The deposit cannot exceed the amount equal to one month’s rent charged by the unit owner. The unit owner is also required to provide the Board with the name of the tenant(s)/resident(s) within 20 days from the commencement of the tenancy.

In most cases, owners will remit the deposit once they have been advised of the corporation’s policy and asked to comply with the requirement. However, there are some instances where unit owners do resist remitting the deposit and dispute the request.

In this case, the corporation may opt to enforce the collection of the deposit by doing the following:
• Confirm that their by-laws allow for the collection of a deposit;
• Send a letter to the unit owner requesting that the deposit and tenant (s) information be remitted;
• Follow up with a demand letter if the deposit is not remitted after the original request; and
• If the demand letter does not result in a payment, the Board may then consider preparing and registering a caveat against the unit title for the amount of the rental deposit.

It is the responsibility of the unit owner to give the condominium corporation’s Board written notification that their tenant(s) have vacated the unit in order to get their deposit back. The corporation shall return the deposit within 20 days of receiving the written notice, unless they have used a part of or all of the deposit for repairs or replacement to the common property, which was damaged by the person(s) residing in the unit or by their guest(s).

The Board is entitled to use the deposit as previously mentioned, however if the Board does use a portion or all of the deposit, they must provide the unit owner with a statement detailing the amount used and the balance remaining. If the corporation cannot determine the amount to be used at the time they receive notification from the unit owner that they tenancy has been terminated, it must deliver to the unit owner an estimated statement showing the amount they reasonably expect to use and then provide the unit owner with a final statement within 60 days of delivering the estimate.

If you are purchasing a condominium unit as a revenue property or have the occasion to rent or lease your unit for a set period of time, you should familiarize yourself with the corporation’s by-laws with respect to the rental or lease of your unit. It is important to remember that all tenant(s) are responsible to abide by the corporation’s by-laws, as is each unit owner/resident. Unit owners should provide their tenant(s) with a copy of the corporation’s by-laws, so that they can familiarize themselves with the rules governing the condominium in which they will be living. Unit owner’s who do rent or lease their units should also be aware that the Corporation does have the ability to terminate the tenancy should the tenant(s) not abide by the corporation’s by-laws.  CL

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