Cove Resort unit owners lose court case to opt out of rental pool – West Kelowna News

Photo by: The Cove

Trying to leave a rental pool did not end well.

An attempt to get out of a rental pool did not go well for condo owners at a West Kelowna resort.

In a decision by the Supreme Court of British Columbia on Wednesday, owners of suites at the Cove Resort were told they could not leave the rental pool they had contractually signed up to years earlier – an arrangement that would have given individual owners more freedom and the possibility of higher profits.

British Columbia Supreme Court Justice Carla Forth said she had to balance the wishes of the nearly 30 owners who wanted out of the lease with those of the resort as a whole and she could not let them go.

“If I decline to terminate the agreement, the applicants will be able to continue to rent their unit (if they so choose) only through the rental pool,” Forth wrote.

“They will not be able to rent their units privately and keep all the profits. While their profits will inevitably be shared with the landlord, their guests will continue to enjoy the benefits of shared ownership and hotel services.”

On the other hand, it expressed concern about the practical consequences and the operational challenges that would arise from terminating the Pact.

“The resort was always intended to be operated as a strata hotel, with guest services such as a spa, restaurant, 24-hour security and reception, and on the evidence before me, this is something that prospective purchasers would have been aware of or could have known with reasonable care and caution.”

She said voiding the agreement and allowing the plaintiffs to privately rent their units to avoid profit sharing – despite their decision to invest in the development of such a hotel-condominium structure – would be “unfair” and would have negatively impacted the other owners.

This would have “wider negative consequences” for the underlying development.

“I accept the defendant's submission that excluding such a large number of resorts from the rental pool would likely financially prevent the defendant from providing most, if not all, hotel services,” she said in her decision.

“I also accept that it would be unfair to other rental property owners who bought into the scheme because they assumed it would operate on a single rental pool system.”

It therefore dismissed the action and awarded the defendant the costs.