April 2, 2023 - As reported in an article by journalist Zacharie Gaudreault of the newspaper Le Devoir, a co-owner of a building located in the Griffintown district of Montreal has been sentenced by a judgment of the Superior Court of Quebec to pay more than $85,000 in penalties and extrajudicial fees for illegally renting her short-term apartment, between 2016 and 2019.
The syndicate of Co-ownership of Griffin Îlot 10 Residential, represented by lawyer Karl Michel of LJT Avocats, asked the Court to make a permanent injunction order against Ms. Lu Zhao and to condemn her to pay damages, for violation of the provision of the building's by-laws that prohibits co-owners from renting their housing on a short-term basis on websites dedicated to short-term rental, such as Airbnb.
Facts
In 2014, Ms. Lu Zhao acquired an apartment located in a condominium building of 187 units spread over 19 floors, in the heart of the Griffintown district. However, she did not acquire this accommodation for accommodation, but rather to rent it on a short-term basis to passing tourists.
However, in August 2016, at a meeting of co-owners, an amendment to the building's by-laws was adopted to prohibit renting a dwelling for less than 12 consecutive months. Offenders are then liable to a fine of $1,000 for a first violation, a sum that rises to $3,000 for subsequent offences. The regulation was amended again, in April 2017, to specify in black and white that "the promotion of accommodation on sites dedicated to short-term rentals, such as Airbnb, is prohibited".
On March 20, 2019, after noting several violations of the By-law by Ms. Zhao regarding the prohibition on renting the short-term dwelling, the Syndicate gave formal notice to her to immediately cease her short-term rental activities.
Ms. Zhao ignores this formal notice and continues to rent her home on Airbnb, claiming that it is actually her tenant who sublets this property on this platform. However, this tenant is "fictitious" and is simply part of the "scheme" used by the co-owner to rent her housing short-term for years, ruled a judge of the Superior Court of Quebec, on March 27.
"The evidence unequivocally demonstrates that this person does not exist and is instead the pseudonym of Ms. Zhao who created an online profile using this name," the judgment states. Justice Azimuddin Hussain also notes that the time of the creation of the account of this fictitious person, in 2017, coincides with the time when the regulations of the building were amended to specify that short-term rentals on platforms such as Airbnb are prohibited.
The evidence gathered by the syndicate also shows that tourists were entering Ms. Lu Zhao's home through the neighboring building, using an "elaborate but devious system" used by the co-owner in the hope that "no one would be aware of her activities".
According to lawyer Karl Michel, the syndicate of co-ownership still managed to document the presence of tourists in this accommodation. An administrator monitored advertisements published by Ms. Lu Zhao's pseudonym and knocked on the door of the apartment when tourists went there to ask to photograph their identity documents to verify that their real address was not that of Ms. Zhao's apartment. The building's security guard also made sure to alert the syndicate when he saw tourists with their suitcases entering the building.
Judgment
The Superior Court of Quebec granted the requests of the syndicate of co-ownership and ordered Ms. Lu Zhao to stop renting her dwelling for periods of less than 12 consecutive months. The co-owner must also remit $49,000 to the syndicate for unpaid offences, as well as $34,387 for the extrajudicial fees of the syndicate's lawyer, for a total of $83,387.
A recurring problem reported to the newspaper Le Devoir
Two major players in co-ownership confirmed to Le Devoir that this issue affects the proper functioning of syndicates of co-owners, who must turn to the courts to try to put an end to illegal short-term rentals in their building.
"Penal clauses [...] are written in such a way that it is really a deterrent to short-term rentals, "says Yves Joli-Coeur, partner at Dunton Rainville, who is also president of the Regroupement des gestionnaires et copropriétaires du Québec. Thus, there is a risk of discouraging more co-owners from engaging in this practice, notes the lawyer. "Generally, it has a deterrent effect."
Ms. Élise Beauchesne, of Solution Condo, who is also president of the Association québécoise des gestionnaires de copropriétés, believes that it is above all the cities and the Quebec government that have the appropriate means to tackle illegal short-term rentals, in particular by deploying more inspectors on the ground. "Someone has to do the proper checks and the penalties have to be steep. Otherwise, people will continue. »
According to Ms. Beauchesne, "It's very profitable for them, so they have a lot of imagination to get around all the mechanisms that are put in place to try to force the law to be respected.
Montreal, April 2, 2023
