BC says strata hotels will be exempt from short-term rental rules

The Province of BC has announced clarity for the short-term rental (STR) operating in strata hotels and motels.

BC’s new STR rental regulations go into effect on May 1.

On Wednesday, the province provided details about strata hotels and motels being exempt from the province’s principal residency requirement short STRs.

According to a release, strata hotels and motels are facilities made up of individually owned strata lots, where accommodation is provided similar to a hotel or motel. The units are often managed and rented out by the strata hotel or motel, not the individual.

When the STR regulations were introduced in October 2023, they included criteria that STRs could only operate in the host’s principal residence.

The province defines a principal residence as “the residence in which an individual resides for a longer period of time in a calendar year than any other place.”

According to the release, the first option is for properties used as a strata hotel or motel before or on Dec. 8, 2023 are eligible to apply for the principal-residence exemption if they operated in a manner similar to a hotel or motel.

That includes having front desk staff, one or more employees or contractors who provided housekeeping services and having a platform service available exclusively for the use of owners offering STRs at the property.

A second option is available for properties who provided accommodation before Dec. 8 similarly to a hotel or motel, before Dec. 8, 2023, and more than one strata lot on the property is not able to t be used as a principal residence by anyone due to restrictions under zoning, rental management agreement or a restrictive covenant.

For newly constructed strata hotels and motels that were capable of accommodating people on or after Dec. 8, 2023, to be exempt, they must have all three services mentioned in the first option and at least one of the legal-use restrictions described in the second option.

“The exemption for strata hotels and motels is expected to apply to all units on the property, so there is consistent treatment of all of the units for the entire property,” the release says.

“Other properties, such as existing residential buildings that do not meet the above requirements, will not meet this exemption from the Province’s principal-residence requirement.”

The changes are meant to ensure certain existing strata hotels and motels will be able to continue providing overnight accommodation, a release says.

Exemptions from the STR policies and principal residency rules ma be granted for municipalities over 10,000 people if they have had a rental vacancy of 3% for two consecutive years.

However, unique exemptions may be granted.

That is the case in the City of West Kelowna, a tourism-dependant city.

In February, West Kelowna City Council agreed to opt out of the principal residency requirements for purpose-built tourism and resort developments like Barona Beach, Boucherie Beach, Paradise Estates, The Cove Lakeside Resort and Casa Loma Resort.

However, outside of those tourism and resort commercial areas, principal residency requirements will still apply for STRS in all zones across West Kelowna.

In late March, they were notified that the province had approved the exemption and was writing the exemption into the legislation.