Listing a condo for short-term stays can change the occupancy you report to your insurer, add guest and rental-income exposures, and bring separate provincial, municipal, and strata rules into play. A 2023 B.C. court decision also shows that the strata corporation’s insurer may not always be able to recover an insured common-property loss from a short-term guest.
For this update, our editorial team reviewed the CanLII Connects analysis of Strata Plan VR 2213 v Schappert, B.C.’s short-term rental bylaw guide, B.C.’s Strata Property Act, and the federal condo insurance guide.
How Can Short-Term Rentals Affect Condo Insurance?
Some policies allow short-term rentals, others don’t, and some require an endorsement or policy change. Platforms may offer a guest-damage program, but it doesn’t replace your insurance. Talk to your insurer.
Understanding Short-Term Rentals and Condo Insurance
| Layer | Question it answers | Document or authority to check |
|---|---|---|
| Provincial and local rules | Can a host allow short-term accommodations at this address? Does the host have to register? Is a business licence required? | Provincial registries and principal-residence requirements, First Nation laws where applicable, and local licensing and zoning requirements |
| Strata or condo rules | Is your condo corporation OK with short-term rentals? Are they allowed, limited or prohibited? What are the procedures and fines? | Registered declaration or bylaws, rules, amendments, minutes and written approval |
| Strata corporation insurance | Which building, common property, original fixtures and corporation liabilities are insured? | Current master policy, deductible schedule, certificate and bylaws |
| Host’s own coverage | Are the unit, improvements, contents, liability, rental income and deductible exposure insured during short stays? | Unit-owner policy, short-term-rental endorsement or commercial form, plus written insurer confirmation |
Having a valid provincial short-term-rental number does not override condo rules that prohibit short-term rentals. Likewise, even if a condo allows short-term rentals, that doesn’t mean a condo insurance policy allows them. Each situation needs to be considered on its own.
The Schappert Ruling Explained
In a case that may be relevant in B.C., a guest stayed five nights through Airbnb in a condo building that allowed short-term rentals on a full-time basis. The guest accidentally started a kitchen fire; the sprinkler went off, and the resulting water caused substantial damage to the common property.
The strata’s property insurer paid the insured loss for the common-property damage, then sued the guest in the strata’s name to recover the amount paid.
The B.C. Supreme Court in Strata Plan VR 2213 v Schappert, 2023 BCSC 2080, held that, in this specific case, the guest was an insured under section 155 of the Strata Property Act. Units could be rented as short-term rentals full-time, so short-term guests were the norm. An insurer cannot sue its own insured at common law. Therefore, its subrogated lawsuit against the guest failed.
The covenant to insure and waiver in the strata bylaws did not, on their own, provide coverage to the guest. This is a trial-level decision dealing with specific policy terms and a specific piece of legislation in B.C. It does not establish that guests are universally insured throughout Canada, nor does it necessarily mean guests will never be liable for damage in any circumstance. Condo owners could still be responsible for deductibles and losses not covered by insurance.
How This Ruling Could Impact Your Condo Insurance Costs
While the decision may influence how B.C. strata insurers and their lawyers consider recovery against guests in similar situations, it doesn’t mean condo insurance will increase for everyone, provide less coverage, or that hosts will pay more.
Building rates are based on several factors, including underwriting criteria, claims history, replacement value, deductibles, construction and occupancy. Check with your strata council or manager and request a copy of the current master policy summary, including any material changes in coverage.
In B.C., the Strata Property Act requires an annual insurance review to ensure adequate coverage, an insurance report at the annual general meeting, and notice to owners and tenants of material changes in coverage, such as increased deductibles.
Could You Be Personally Liable for Damage Caused by Airbnb Guests?
It depends on several factors, including the cause of the damage, your actions, the legal status of the guests, the strata’s bylaws, B.C. law and your insurance coverage.
If you’re responsible for the damage, a B.C. strata corporation can sue the owner for its insurance deductible. Ask about deductible-assessment coverage on a unit policy. Deductible-assessment coverage may have a limit of liability, exclusions and restrictions for certain causes of loss.
Ask about accidental damage from short-term renters, theft, vandalism and intentional acts, since coverage for one does not necessarily mean you’ll have coverage for the others. Consider whether the deductible-assessment limit is adequate compared with the deductibles for fire, water and other risks.
Read More: See How Personal Liability Insurance Works
Read More: Explore Insurance for Airbnb Hosts
Current B.C. Permission Checks
B.C.’s provincial guide defines a short-term rental as accommodation offered to the public for less than 90 consecutive days. Provincial registration and a principal-residence requirement apply in many situations, with exemptions and location rules. Local bylaws can be stricter.
A B.C. strata corporation may restrict or ban short-term rentals. If its bylaw sets the fine, it may impose up to $1,000 per day for a continuing short-term-rental bylaw breach. This is a maximum, not an automatic fine for every building.
- Check whether the provincial principal-residence requirement applies at the address and whether an exemption is current.
- Register the offer when required and display valid provincial and local numbers as the applicable rules require.
- Check municipal zoning, business licensing and any local host or safety conditions.
- Obtain the strata’s current registered bylaws and written approval before relying on an older rule or sales listing.
- Confirm insurance in writing before accepting a booking. Describe the platform, direct bookings, frequency, unit occupancy, services and property manager.
Proactive Steps to Protect Yourself
Keep copies of:
- Your insurance company’s written consent to rent out your unit
- Your insurance policy and any riders
- Strata consent and bylaw changes
- Local registrations and licences
- Photos of contents and improvements, receipts and serial numbers
- House rules for guests
- Emergency contact information
When an incident occurs, follow the reporting requirements of your rental platform’s protection program, insurer and strata. Keep records of conversations, reservations, online messages, costs, photos and other relevant information.
Read More: Read About Renter Responsibility for Guest Damage
What to Ask Your Condo Corporation and Insurance Provider
- Are there rules about the length or type of stays?
- Do they require written approval before hosting?
- What are the property and liability deductibles for the building?
- Can the condo or strata charge the deductible back to the unit owner?
- Am I insured for guests on all of my rental channels, including direct bookings and rental platforms?
- What is excluded?
- Is there coverage for theft or damage by guests, accidental or intentional damage, lost rental income, unit improvements and contents?
- Do I need to provide updates if the rental frequency, managing agent or occupancy changes?
- If the platform provides protection, is it primary or secondary to my unit insurance?
- What are the deductibles, claim deadlines and documentation requirements?