August 22, 2016 - A recent judgment rendered in Montreal by Justice Gérard Dugré, of the Superior Court, casts uncertainty on the capacity of enforcing a prohibition to rent a condo ( for the short-term) in a co-ownership.
At the heart of the dispute were the Montreal” Syndicat des copropriétaires Sir George Simpson”, the company Day6 Film Productions and two co-owners-lessors. The latter rented their apartment to Day6 for three months to accommodate a tenant. Yet the declaration of co-ownership (By-Law of the immovable) does not allow rentals of less than a year.
After learning that the co-owners had violated the By-law, the syndicate made an application to the Superior Court for an injunction to enforce the ban stipulated in the declaration of co-ownership.The motion for an injunction requested that the lease signed between the co-owners and their tenant be declared null and void; that the co-owners do not allow the tenant to continue occupying the apartment, and an order for the eviction of the occupants of the unit. But the court had a different agenda, although it concluded that the three-month lease violated the prohibition contained in the declaration of co-ownership.
The court pointed out more particularly that "there was no evidence that at the time the parties signed the lease, the lessee knew of the prohibition contained in the declaration of co-ownership or that the By-Law of the immovable had been brought to its attention. The annulment of the lease and the eviction the occupants, at the request of the syndicate, would thus result in the violation, without cause, of the rights of a tenant acting in good faith. "
Furthermore, a co-owner may allow a third party to stay in his unit as an occupant, guest or visitor, under the Charter of Rights and Freedoms. The Superior Court therefore ruled that "it was not possible to order the eviction of the occupants of the dwelling."
However, the court considers that an action for damages or a penal clause providing fines could be useful in those cases where an injunction cannot be granted.