Over the past decade Airbnb has changed the way people choose their accommodations when they’re travelling away from home. The rise of Airbnb and other short-term rental services has forced cities to rethink how they regulate rental properties to ensure landlord, tenant, and guest rights are protected.
According to the City of Toronto website, short-term rentals are currently not permitted in the City. This lack of regulation spurred the City of Toronto to draft a new bylaw to regulate short-term rentals. Bylaw 613-2018 has been appealed to the Ontario Municipal Board who had scheduled a two-day hearing for August 30 and August 31, 2018. While the City does not expect a ruling from the Board for at least 8-weeks it will be important for landlords, tenants, and future guests to be aware of the important components of the bylaw before it takes effect.
The key to the proposed bylaw is that short-term rentals would be permitted throughout the city in all housing types. The only caveat is that an individual can only host short-term rentals in their “Principal Residence”. Schedule A of the bylaw defines “Principal Residence” as a dwelling unit owned or rented by an individual person, either alone or jointly with others, where the individual person is normally resident. If the proposed bylaw is passed tenants and property owners will enjoy the right to engage in short-term rental arrangements of their “Principal Residence”.
Individuals will be permitted to rent up to three bedrooms or an entire residence. Further clarification is provided for individuals who wish to rent out their entire residence while they are away; they can do so for a maximum of 180 nights a year.
Individuals who wish to participate in short-term rentals will be required to register with the City for a $50.00 fee and will have to pay a 4% Municipal Accommodation Tax on all rentals shorter than 28 days. This will allow the City to keep track of individuals who engage in short-term rentals and receive tax revenue from that business. Companies like Airbnb will have to pay a $5,000.00 registration fee and 1.00$ per night of accommodation booked through their service.
If passed, bylaw 613-2018 will be an important step in establishing regulations over short-term rentals. Property owners and tenants who choose to engage in short-term rentals of their primary residence will be forced to register with the city and pay the appropriate taxes. Landlords will be faced with the disruption that short-term rentals can have on their other tenants and may have to mediate disputes between their tenants and short-term rental guests. Tenants who wish to engage in short-term rentals need to be aware of their rights and responsibilities in this changing legal landscape.
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