The BC Supreme Court has publicly released its decision to dismiss a short-term rental lawsuit brought by eight property owners against the District of Sechelt.
The petition was filed by Ben Lin Zeng, Gary Bearchell, Greg Bellamy, Shawn Deveau, Erin Frizzell, Emma Goodman, Tracey Jackson, and Kate Newstead on Oct. 20, after the District of Sechelt council adopted amendments to bylaws that include new short-term rental (STR) regulations and created operating categories of STRs.
The petitioners asserted that the district “did not have the statutory authority to modify the Business Licence Bylaw in the manner that it did,” and that it went beyond regulating STR businesses to prohibiting “otherwise lawful businesses."
In the document published on Feb. 14, the oral reasons for the decision showed Justice Jan Bronger considered three questions raised by the petitioners: whether some of the amendments were outside of the district’s legislative authority, if the regulations conflict impermissibly with provincial non-conforming land use legislation and whether the amendments are unacceptably unclear and contradictory.
Precisely within the definition of the term 'regulate'
Brongers made the decision to dismiss the petition with costs payable by the petitioners to the district on Dec. 28, after a Dec. 14 hearing. She determined the rules established in the district’s amendments “falls precisely within the definition of the term ‘regulate’ that is set out in the … Community Charter,” and do not “outright prohibit or prevent them from operating…” She further disagreed with the petitioners that the district attempted to impose land use zoning regulations through the business licence bylaw or that the provisions would apply differently depending on the zone the residential property is located in. She did not determine the extent of the petitioners’ rights as lawful non-conforming use, if any.
The eight petitioners previously operated short-term rentals on properties that are not their primary residence — all eight self-identified as “non-resident property electors” — and claimed to hold valid STR business licences from the district that were set to expire on Dec. 31. Sechelt’s new regulations restrict the number of secondary residences that can operate as STRs to 15. Anyone who wants to operate an STR on a secondary residence in Sechelt has to apply for one of the 15 available temporary use permits (TUPs), which go through a review and approval process.
The petitioners said the new regulations “creates a distinction between classes of owners: Those who reside in Sechelt and those who do not,” the petition states. They argued that using residency as a condition for approval of a temporary use permit is prohibited and that the Local Government Act does not allow business licence bylaws to dictate how lands and buildings are used.
“The Petitioners say that the District does not have the power to enact the bylaw amendments, and that they are void for vagueness and uncertainty,” the decision states.
The District of Sechelt, the respondent in this case, disagreed with the petitioners’ standing, and said the application was brought too early, since it was not evident that the petitioners would not be able to continue using their properties as STRs. The justice dismissed the district’s objection to the prematureness of the petition. The district also objected to the sufficiency of the petitioners’ evidence, and denied that the provisions in question prohibit businesses or regulated the use of the land.
Brongers outlined in her reasoning that since only one of the eight petitioners submitted an affidavit and none of the eight can be considered “electors”, “the other seven petitioners who did not make their own affidavits do not have standing and are not entitled to claim any relief...”
In her decision, Brongers stated, “While I reject most of the District's threshold objections, I am not persuaded that the amendments made to the business licence bylaw deserve to be struck on the grounds put forward by the Petitioners.”
She also concluded that petitioners’ argument of vagueness was unfounded.
On Feb. 16, the District of Sechelt provided a written statement about the court decision: “The court determined that the changes to the business licence bylaw respecting the operation of short-term rentals does apply. This outcome also reconfirms that the steps taken and changes made to the operation of short-term rentals in Sechelt were done so lawfully. Of course, we’re also pleased that the judge ruled in favour to reimburse the court costs.”
Sechelt introduces TUP exemptions anyway
Following the court decision, the District of Sechelt council did decide to make a change.
At the Feb. 1 council meeting, Sechelt council chose to offer Type 3 operators (those operating STRs in “unhoused” secondary residences) the option to skip applying for a TUP — if they can prove their STR was lawfully operating before the adoption of the amended zoning bylaw in October 2022. (Councillors Dianne MacLauchan and Adam Shepherd were opposed to the decision, and Coun. Brenda Rowe was not present at that meeting.) A business licence is still required for all short-term rentals.
At that meeting, staff told council the question of non-conformity has been raised throughout the process. Sechelt’s director of planning, Andrew Allen, made reference to the court decision, where the business licence bylaw was deemed valid, but raised the question of non-conformity respecting land use. Allen said staff were “looking at the possibility of a compromise, in part.”
He noted there are up to 30 Type 3s that included people who had declared non-conforming status, and others who operated last year and applied for a TUP. Another six new applicants who were not operating last year (and therefore are not non-conforming) have applied for TUPs. Staff’s suggestion was to reach out to operators to gain clarification.
Allen also noted staff are aware of others who intend to operate but have applied for neither a business licence nor a TUP. “It may take the rest of this year to truly unfold what the numbers are,” Allen said.
Letter sent to operators
On Feb. 14 — the same day the Supreme Court Justice’s decision to dismiss the petition became public — the District of Sechelt sent a letter to STR operators to explain the TUP exemption for pre-existing Type 3 operations. It says applications for a Type 3 business licence must be made with either a TUP application or a sworn statement from the property owner (witnessed by a commissioner for taking affidavits in B.C.) that provides supporting evidence of the history of STR use on the property before Oct. 6, 2022, and other specifics about the property and intended operations.
“Without this confirmation the District can only issue a Type 3 licence if the applicant also applies for and is granted a temporary use permit,” the letter states.
As of the Feb. 14 update on the District’s website, there are 36 Type 3 STR applications submitted to the District. Of those 36 applications, nine addresses listed are associated with the eight petitioners.
Sechelt’s STR regulations came into effect on Jan. 1. Applications for the district’s business licences and temporary use permits for STRs are currently being reviewed by staff and council. Residents living near Type 3 STRs that require a TUP have until Feb. 20 to comment on those applications. Council is expected to consider those applications at the March 1 council meeting. See more information at yoursaysechelt.ca/str-review.
Council also made a motion to have staff report on results and analysis by November 2023, after the summer tourism season.
