The Regulatory Landscape of Short-Term Vacation Rentals in BC
Are you considering purchasing a lakefront vacation property in British Columbia with the intention of offering short-term vacation rentals to guests in order to generate revenue and offset your cost of ownership? With its stunning natural beauty and thriving tourism industry, BC offers a lucrative opportunity for property investors and in particular for those who would otherwise be spending thousands of dollars renting vacation accommodation themselves. However, before diving into this venture, it's essential to understand the regulatory landscape, including the Province's newest Short-Term Rental Accommodations Act, as well as the impacts of municipal zoning and strata bylaws.
Understanding the Short-Term Rental Accommodations Act:
The Short-Term Rental Accommodations Act just came into effect on May 1st, 2024 — provincial legislation that regulates short-term rentals across British Columbia. The act aims to balance the interests of homeowners who wish to supplement their income by renting out their properties with the growing impacts of housing availability and affordability, as well as with the concerns of neighbours and communities regarding noise, and safety. This legislation places various restrictions on short-term vacation rentals and requires individuals to obtain a business license from the respective municipality. Here are some key points to consider:
Licensing Requirement: Prospective property purchasers should familiarize themselves with the licensing requirements within the applicable municipality. Licenses are obtained from the local government and may be subject to different conditions in different parts of the Province.
Restrictions and Exemptions: The Act places numerous restrictions such as requiring the property to be the owner’s principal residence and makes various definitions such as that a short-term rental is any occupancy of 90 days or less; however, there are exemptions for various smaller communities, resort municipalities, and for jurisdictions where the long-term rental vacancy rate is above 3%.
Compliance: It's crucial to ensure that any property you purchase and the use for which you intend complies with the regulations set forth by the Act to avoid potential legal issues in the future.
Municipal Zoning and Its Impact on Property Use:
Municipalities in BC have the authority to regulate land use through zoning bylaws, which can affect the viability of short-term vacation rentals. Before purchasing a property, consider the following:
Zoning Designations: Review the zoning bylaws in the area where you plan to buy a property. Some municipalities may have specific zoning designations that either permit or restrict short-term rentals and its possible they may be more restrictive than that of the Province.
Consult with Local Authorities: Consult with local municipal authorities to understand any existing or proposed zoning regulations that may impact your ability to operate a vacation rental.
Strata Bylaws and Their Impact on Renting:
If you're considering purchasing a condominium, whether it be an apartment-style, townhouse, or private vacation home in either a mixed-style or bare land strata, for use as a short-term vacation rental, it's essential to understand the strata bylaws established by the condominium corporation:
Rental Restrictions: Some strata corporations impose restrictions on short-term rentals, including minimum rental periods and guest policies.
Manager Restrictions and Agreements: Some communities may operate as a strata “hotel” or may have other agreements in place which restrict who can act as a rental manager. In the case of strata hotels, owners are required to place their strata lot (residence) in a rental pool and a dedicated management company responsible for all aspects of marketing, taking bookings, checking-in guests, and cleaning properties when guests check-out, etc.
Review the strata bylaws carefully before committing to a purchase and ensure you understand what restrictions are in places and what cost impacts they may have.
Investing in a lakefront vacation property in British Columbia and offering short-term vacation rentals can be a rewarding endeavour, but it requires careful consideration of regulatory requirements and potential challenges. By understanding the Province's Short-Term Rental Accommodations Act, as well as the impacts of municipal zoning and strata bylaws, prospective property purchasers can make informed decisions and position themselves for success in BC's thriving tourism market.
Now let’s take a closer look at how the Province’s Legislation and Municipal Zoning Bylaws impact some of the most popular lakeside communities.
Osoyoos
While the provincial Short-Term Rental Accommodations Act did not include the Town of Osoyoos in the legislation, the Town decided to opt-in to the provisions of the Act and thus it came into effect on May 1st, 2024. Osoyoos will continue to allow short-term vacation rentals in an owner’s primary residence and is also home to several strata hotels which are exempt from the provincial legislation. As of this writing, the Town of Osoyoos is in process of updated their Bylaw with respect to short-term vacation rentals.
Summerland
As of May 1st, 2024 when the provincial Short-Term Rental Accommodations Act came into effect, the only legal short-term vacation rentals in the District of Summerland are those that operate within an owner’s primary residence or are otherwise exempt from the act, such as strata hotels.
Peachland
Peachland does not allow short-term vacation rentals other than allowing renting of one room in an owner’s primary residence or operating a traditional Bed & Breakfast.
West Kelowna
The provincial Short-Term Rental Accommodations Act does not currently apply in the City of West Kelowna as the they were able to opt-out in light of the City’s long-term residential vacancy rate being above the 3% threshold. It’s important to note that should the vacancy rate fall below this threshold in the future, the City will be required to implement the restrictions prescribed in the Act. Furthermore, this opt-out was only requested and granted with respect to Tourist and Resort Commerical zones (C5, C6, CD2, CD7, CD8). Residential zones will continue to only allow short-term vacations rentals from an owner’s principal residence and bylaw updates now require that the owner be present while the short-term rental is being rented.
Kelowna
As of May 1st, 2024 when the provincial Short-Term Rental Accommodations Act came into effect, the only legal short-term vacation rentals in the City of Kelowna are those that operate within an owner’s primary residence or are otherwise exempt from the act, such as strata hotels.
Furthermore, earlier in the year the City of Kelowna’s Zoning Bylaw was updated to remove short-term vacation rentals as a secondary-use in all zones within the city, effectively short-term vacation rentals from the City. However, there is a sizeable exception: 498 properties were granted 'legal non-conforming status an are allowed to continue to operate as long as they continue to renew their license each year and continue to meet provincial principal residence requirements. No new licenses will be issued.
Lake Country
As of May 1st, 2024 when the provincial Short-Term Rental Accommodations Act came into effect, the only legal short-term vacation rentals in the District of Lake Country are those that operate within an owner’s primary residence or are otherwise exempt from the act. Lake Country further restrict which zones allow for short-term vacation rentals as a secondary use.
Vernon
As of May 1st, 2024 when the provincial Short-Term Rental Accommodations Act came into effect, the only legal short-term vacation rentals in the City of Vernon are those that operate within an owner’s primary residence or are otherwise exempt from the act, such as strata hotels. As of this writing, the City of Vernon is in the process of updating their Bylaw with respect to Zoning and is anticipated to included provisions for allowing short-term vacation rentals as a secondary use in zones other than the Resort Tourist and Resort Commercial zones.
Sicamous
While the provincial Short-Term Rental Accommodations Act did not include the District of Sicamous in the legislation, the District decided to opt-in to the provisions of the Act and thus it came into effect on May 1st, 2024. Additionally, in Sicamous, short-term vacation rentals are currently only permitted in the MUR-2, CR, C-1 to C-4 and C-6 zones.