1. What are the rules for AirBNB?
Every city in Ontario either has or will be announcing what the rules will be for renting out all or part of your property on AirBNB or other short term rental websites. In Toronto, for example, it is expected that only a principal residence will be able to be used for AirBNB. You can either have up to 3 of your bedrooms being rented out, or you can rent out your entire home, up to 180 days per year. You will also have to pay to register your unit with the City, pay a $50 registration fee and charge a 4% tax as well,
2. Are guests considered tenants under the Residential Tenancies Act of Ontario?
This is not a simple answer. If you are living in a home or condominium and you just rent out rooms to guests on Air BNB, then they are not tenants and can be treated as a guest and must leave when you ask them to leave. You do not have to use the Ontario Standard Form Lease. However, if they are renting your entire home, even for a few days, an argument can be made that they are in fact tenants and you need to sign the Ontario Standard Form Lease which will govern the relationship. It will make no difference if this is a furnished apartment or not.
3. Can you evict a tenant to turn the unit into an AirBNB?
The likely answer to this is no in Ontario. While an eviction is possible if you are converting the unit to a commercial use, it is not permitted when the business will be for AirBNB. It will also likely not be possible to evict someone using the personal use family reason and then trying to rent all or part of the home on AirBNB before one year after the eviction. This could lead to penalties under the Act.
4. Can you evict a tenant who is renting your unit on AirBNB without permission?
The answer is likely yes. This would be considered either an illegal sublet if no permission was granted in advance and a violation of the Act in that the tenant would be subletting for more money than they are paying in rent. However, the landlord would have to start eviction proceedings regarding any sublet within 60 days of finding out.
5. Will insurance cover any damage caused by guests?
AirBNB and similar sites do offer insurance coverage, however, it is recommended that you also inform your own insurance company if you are planning to rent out on AirBNB, since the risk of damage will increase. For example, if the guest and owner privately agree to extend their stay without going through the short term website, the website insurance policy will likely deny any claim. Further, if a damage occurs that was not caused by the guest, the owner’s insurance claim to their own company will likely be denied if they were not advised about the new use of the property.
Mark Weisleder is a Partner, author and speaker at the law firm Real Estate Lawyers.ca LLP.
Contact him at mark@realestatelawyers.ca or toll free at 1-888-876-5529
