Permanent residents of Summerland Waterfront Resort trying to stay after being told the bylaw won't allow them to

The Summerland Waterfront Resort (SWR), on Lakeshore Drive, has gone through multiple zoning changes and is coming before council once again as permanent residents of the building fight to be allowed to stay in their homes.

Loreen and Ed Knelsen have been owners and occupants of a unit at the SWR for over a decade but they now feel they are being pushed out of their home due to being permanent residents in a resort that relies on owners putting their places into the rental pool.

“It’s always been maintained that we lived here full-time. No problem for 10 years and 11 days and then we got a notice that oops, a mistake had been made,” Loreen Knelsen said.

“The real estate agent marketed it to us and we bought it under the premise that we could live here full time, or put it in the rental pool.”

The resort had two buildings built, one with limits on how long owners could stay in the unit throughout the year and the other without any express limitations on the unit owner’s ability to use their units.

Knelsen explained that when they purchased the unit, it was her understanding that the realtor, the broker, the lawyers, the general manager of the resort and the Strata council were all aware of the couple's intention to be in the unit full time, out of the rental pool.

“The District of Summerland even knew because we had to have our taxes through there and we had to have a post office opened up.”

In a report heading to Summerland council on Monday, staff stated that the "phase one" building allows owners a maximum of 180 days of residence a year, with no more that 60 of those days in the summer, and not for longer that 30 consecutive days.

And while the rental pool covenant for "phase two," where the Knelsens live, does not impose a limit on the number of days for use by the owners of their units, District staff determined that the covenant, when read as a whole, makes clear that the units are to be used primarily for temporary tourist accommodation, including expressly providing that it does not alter the requirements of the District’s zoning bylaw, which only permits “temporary accommodation”.

Summerland Waterfront Resort strata president, Leisa Shea said over an email that the hotel unit owners using their units exclusively are in violation of the zoning and the strata council is following protocols to bring all owners into compliance.

“Under the Strata Bylaws, owners must be in compliance with zoning applicable to the property,” Shea said. “It hasn’t been working for over a decade. The owners in the Rental Pool have been subsidizing those owners that have chosen to use their hotel unit exclusively. In other words, these owners have had the use and enjoyment of all the amenities of a 4 Star Hotel while other owners have subsidized these costs. The hotel is zoned tourist/commercial, it is a four star hotel. It is not a retirement condo project,” Shea wrote.

Another owner of one of the units, Michael Drance, bought his in August 2019, and was originally told by the hotel manager that he could take it out of the rental pool on Oct. 1.

“They were marketed and sold as that, for 15 years the District never had any issue with that and now they're saying we're not allowed to do that,” Drance said, adding that then strata recently came back stating he wasn’t allowed to take it out of the rental pool anymore.

While the owners say the covenants on their property do not require them to have the unit in the rental pool or state limits on occupying the unit, the bylaw for the resort hotel as a tourism building contradicts this.

“The covenant allows me to live there full time... Nobody thinks that the District would register a covenant that is not allowed in their zoning," Drance said.

In late 2019, the District was made aware of the residents living full time by the resort’s strata council, when the use of the units for full-time residential use had become an issue between some of the unit owners and the strata.

Cindy Byrne, an owner of two units at the resort for many years, also shared her story over email.

“From the very beginning, and every year since, SWR owners were allowed to take their units out of the rental pool for full time use with no time limits. The South building, in particular, was always promoted, sold and subsequently managed on this basis. The units were designed for it,” Byrne said.

“I reasonably relied on the listing realtor who marketed the suite as being able to opt in or out of the rental pool, my own real estate agent confirmed this, the GM of SWR said the south building could be used as a residence and it would be no problem to take my units out of the rental pool. In addition, my conveyancing lawyer reviewed the section 19 restricted covenant on my title which allows for unlimited owner use. I feel strongly I did my due diligence when purchasing this unit.”

Shea disagrees with this, stating “It should be noted that all of the zoning, covenants and rules regarding the property have been in place since 2006. Some people either ignored or did not read the restrictions and now want those restrictions changed to accommodate them.”

While Knelsen and the other owners try to find a solution to their living situation, owners are becoming subject to hefty added fines and fees.

"In the meantime, well they're doubling our strata fee to stay here. They're also at the end of that period going to charge us for the furniture fixture and equipment to bring it back into what the hotel furniture and stuff like that [costs]. So it would be an extra $24,000 plus the extra $8,000 a year to live here," Knelsen said.

“The fee increase makes it fair amongst all the Hotel unit owners to cover the basic costs that all owners are responsible for contributing to. Instead of all the other owners paying for all the costs associated with running a Hotel, it was decided that those choosing to use their hotel unit exclusively (i.e. out of the rental pool) be required to contribute,” Shea explained when asked about the increases.

“At this point in our life, my husband is 71 and I’m on disability and we don’t have that extra money. We made real life choices to be here, to retire here,” Knelsen said, all while dealing with her husband's poor health throughout this process.

The strata council recognized that two hotel unit owners have life issues that may require time, Shea added.

“In February 2020, the hotel unit owners using their units exclusively were offered a two-year period to bring their unit into compliance. They declined to accept. In January 2021, the four hotel unit owners using their hotel unit exclusively were offered a five year period to bring their unit into compliance. We offered an extension, twice. We have yet to hear back on the second offer.”

Knelsen doesn't feel this offer is fair however, and having their unit moved into the rental pool just forces them to leave.

Summerland council will be reviewing the applications for a zoning change on Monday, with the proposal asking for a zoning bylaw amendment to allow seven units to allow full-time residential use, which staff is recommending against.

But the owners are simply wanting their current covenant agreements honoured, stating the zoning change was not their initial request.