This question is becoming increasingly relevant to many landlords, especially those who own Downtown Toronto condos. The short answer is “yes.”
Issues for the landlord
Undoubtedly, landlords whose tenants re-rent their property through AirBnB without their knowledge can face some unpleasant issues:
- Letters from condo building management demanding to stop noise and disturbances coming from the landlord’s apartment if AirBnB rentals host parties and other crowded events. The Condominium Act allows quite serious financial consequences for the condo owner if her/his condo unit is a constant source of noise and other problems. There are no such consequences for the residential tenant.
- AirBnB guests damage the landlord’s property.
- The tenant uses the landlord’s property to extract higher income. Indeed, she/he does it without the respective benefits flowing to the actual owner of the property.
- Possible future legal troubles related to municipal regulation of AirBnB rentals.
Why it is illegal
If a tenant has rented an apartment from the landlord for the long term in accordance with the Residential Tenancies Act, it would be illegal for her/him to re-rent the same apartment for the short term and charge higher rent for personal profit. This is illegal for the following reasons:
- The Residential Tenancies Act prohibits subletting rental property to someone else without the landlord’s explicit consent. In other words, the tenant must ask the landlord’s permission whenever she/he allows short-term AirBnB renters.
- The Residential Tenancies Act prohibits subletting the rental property for a higher price than the rent payable by a regular long-term tenant. This is exactly what some enterprising tenants do: AirBnb short-term rates may be several times higher than regular monthly rent. The law may consider such an enterprise as an illegal business conducted in the rental unit. As such, it is a ground for eviction of the long-term tenant.
- The Toronto City Council has passed a by-law that limits renting residential properties through AirBnB. This by-law is currently under appeal. However, this factor should be considered in the future.
What to do when it happens
The procedural steps in such eviction are the same as in other cases: the landlord must serve the tenant with an appropriate eviction notice, and a file a respective eviction application with the Landlord and Tenant Board. The Board considers such an application in the open hearing to issue an eviction order.
If your tenant re-rents your property on AirBnB, please feel free to contact us for an assessment of your case.
