Lawsuit of the week: Short-term rental operators sue Sechelt over land use regulations

A group of property owners is taking the District of Sechelt to court to overturn new amendments to the municipality’s business licence bylaw that they say unlawfully restricts them from offering their secondary homes as short-term rentals  

In a petition filed in BC Supreme Court on Oct. 20, landowners Ben Lin Zeng, Gary Bearchell, Greg Bellamy, Shawn Deveau, Erin Frizzell, Emma Goodman, Tracey Jackson and Kate Newstead claim the District of Sechelt overstepped its authority when its council adopted the new bylaws at meetings in September and October 2022.

The group claims they use their properties “on a part-time basis as a secondary residence, with their principal residence being elsewhere.” 

According to the petition, each of the petitioners had existing business licences to operate their short-term rentals, which had to be renewed every year under Sechelt’s zoning and business licence bylaws. The new amendments, however, restricted short-term rentals to an owner’s “principal residence” and limited the number of licences an individual can have to two, while also requiring that short-term rental operators get a temporary use permit for secondary residences.

The petitioners claim that the district’s zoning rules permit short-term rentals, but the amendments create “two classes” of short-term rentals in Sechelt and wrongfully give residents preference over non-residents. Requiring people to get a temporary-use permit for secondary residences under its zoning bylaw “creates a distinction between classes of owners: Those who reside in Sechelt and those who do not.

“Sechelt has no authority to designate, through its zoning bylaw, a zone based on ownership and, more specifically, cannot zone property based on discrimination between classes of owners,” the petition states. 

For the district’s council to use residency as a condition to get approved for a temporary use permit, the petitioners claim, “is prohibited at law.” Municipalities under B.C.’s Local Government Act, according to the petition, aren’t allowed to use business licence bylaws to dictate how lands and buildings are used. In addition, city governments can’t “prohibit” or “undermine” the use of a property under a provision allowing for “lawful non-conforming use” that conformed to the older bylaw regime. 

The district’s business licence bylaw, in other words, is wrongfully prohibiting “otherwise lawful businesses,” namely short-term rentals at secondary residences even though they comply with Sechelt’s “building, zoning, health, sanitation and business bylaws.” 

Furthermore, the petitioners claim it’s impossible to comply with the district’s bylaws because people aren’t permitted to both operate short-term rentals in secondary homes while complying with its new business licensing rules. In effect, the petitioners claim the District of Sechelt is illegally trying to regulate the use of their properties with the new business licence bylaw amendments. 

The group seeks declarations that the amendments to the business licence bylaw are beyond the district’s authority and an order prohibiting the municipality from using residency as a condition to issue temporary-use permits for short-term rentals in secondary properties. The petition’s factual basis has not been tested in court, and the District of Sechelt had not responded to the case by press time.