B.C. judge dismisses challenge of province’s short-term rental rules

A legal challenge to the province’s short-term rental rules by frustrated owners and operators was dismissed as premature.

A legal challenge of B.C.’s short-term rental restrictions launched by a group of property owners was dismissed by the province’s Supreme Court Tuesday.

The Short-Term Rental Accommodations Act was passed in 2023 to try to drive down the number of short-term rentals with the goal of returning units to the long-term market and increasing housing supply.

“It is well known that British Columbia faces a housing crisis in which it has become increasingly difficult to buy affordable homes throughout the province. As that crisis has increased, so too, has the growth in short-term rentals, through platforms such as Airbnb and Vrbo,” reads Justice Jasmin Ahmad’s ruling on the petition for judicial review of the legislation.

“Indeed, it has been said that a significant amount of housing in the province is used for short-term use.”

The legal challenge was brought by a group of individual property owners as well as individuals and businesses that provide services to those property owners, such as management and maintenance.

While the petition for judicial review was dismissed as premature and an abuse of process, the decision does leave room for future court battles over the impact of the legislation “in appropriate circumstances.”

In this case, the petitioners were challenging two specific parts of the legislation. First, that people are only allowed to rent out their own homes or a secondary suite in their homes. Second, that the legislation eliminated “non-conforming use of property” protections which functioned to enable short-term rentals to operate even when prohibited by bylaws – effectively creating an exception to limits put in place by government.

The petitioners argued, according to the decision, that these two provisions would “wrongfully eliminate their ongoing legal use of their properties, extinguish their rights to continue their lawful business activities, and will result in the destruction of a substantial number of small businesses, resulting in job losses and lost revenue.” In addition, they claimed the regulations would “diminish the value of their property and, in effect, amounts to an expropriation for which they are entitled to compensation.”

The ruling – broadly speaking – found that the petition was premature and the impact on the petitioners was, at this point, hypothetical.

Generally, a judicial review is a mechanism for someone to challenge a decision made in another forum, the decision explained.

In this case, the legislation gives a director of compliance and enforcement the authority to investigate violations of the regulations and to make orders or impose penalties on people or businesses who break the rules.

Because none of the plaintiffs had been found to have contravened the regulations, fined or otherwise sanctioned – there was no decision to be reviewed.

“With no administrative action in respect of a specific alleged contravention of the STRAA, there is no ‘actual’ or ‘genuine’ dispute to resolve: the issue is speculative,” Ahmad wrote.

The province argued that the petition was an abuse of process because it was “brought as an improper interference with the legislature’s exclusive authority to enact law,” the decision said.

The decision also considered whether the petitioners had grounds to challenge the law itself. The courts, the judge explained, can only weigh-in on the actions or decisions of the legislature on constitutional grounds.

“Do the issues raised in the petition amount to a constitutional challenge?” Ahmad asked.

The answer, she found, was no.

Although the petitioners raised the issue of rights, the decision noted that “Canada has not elevated property rights to privileged constitutional status.”

Housing Minister Ravi Kahlon welcomed the ruling.

“Our goal around short term rentals was to get more housing available for people in our communities, and it’s working. Rents are coming down, every month we’ve seen rents come down. We’re seeing an increase in our housing supply,” he said.

“We’re pleased the supreme court made that decision, and we can continue on with our work.”