December 18, 2020

by: Michael Conway

The common practice in Ontario is that a residential lease begins with a term of one-year. While that can offer stability and certainty to renters, it can also make things difficult for people who need a place to stay for less than a year. Short-term rentals have emerged as a way for people to rent out their property that they are not using and give renters a more flexible option to suit how long they need to rent for. Websites like Airbnb and Vrbo have made that process incredibly easy for renters and people looking to rent out their homes.

The question comes up a lot now about whether someone who is renting their home using a more traditional lease can list it on one of these websites. For example, John rents his apartment and has lived there for 10 years. He learns that he is going to be away on work for the next 3 months and decides that since his apartment will be empty during that time that he will list it on Airbnb to make some extra money. Can John’s landlord prevent him from doing that?

The answer, in most cases, is yes. A landlord can stop their tenant from being allowed to rent out the unit as a short-term rental. If a tenant rents out the rental unit online, in most cases, it can be grounds for eviction.

A recent decision of the Landlord and Tenant Board (LTB) clarified this. In HOL-05078-19 (Re), 2019 CanLII 134296 (ON LTB) a landlord discovered that their tenant had been renting out the unit on Airbnb and had bookings made into the future as well. This was done without their approval and the landlord sought to have the tenant evicted on those grounds.

The landlord sought to evict the tenant for committing an illegal act in the rental unit. The LTB confirmed that renting out a rental unit on Airbnb without the consent of the landlord is an illegal act in violation of the Residential Tenancies Act. Short-term rentals were found to be a form of subletting. Under the Residential Tenancies Act, a tenant has the right to sublet their unit, but only with the consent of their landlord.

Additionally, the tenant charged more for their short-term rentals than they were paying to the landlord in rent which was a further illegal act. It can be difficult to assess whether a tenant is charging their sub-tenant more than they are paying in rent when it is a short-term rental and the sub-tenant may only be there for a few days. What the LTB did to address this issue is assess what the rents were per day and compare those numbers. The tenant paid $1,950 per month, which came out to $64.11 per day. The landlord brought evidence that the people who rented the unit on Airbnb paid $85-$350 per day.

These violations combined were sufficiently serious that the LTB ordered that the tenant be evicted.

What this means for tenants is that it is theoretically possible to rent your apartment or rental unit online as a short-term rental however you must first obtain approval and consent from your landlord and you can never charge more per day than what you pay in rent. Practically, this appears to mean that in most circumstances short-term rentals will not be an option for renters.

Landlord and tenant issues can often become complicated and the best path forward will always depend on the specific situation. If you have any questions about a landlord and tenant issue please call Ryder-Burbidge Hurley Foster at 613-546-2147 or contact us for assistance with your specific issue.

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This article provides general information and does not constitute legal or other professional advice. It should not be relied on as legal advice or opinion. Please contact Ryder-Burbidge Hurley Foster for detailed legal advice should you have questions of any kind.