Whether tenants can rent their units out on Airbnb is a question that I am being asked more and more. Landlord's are calling me expressing concern that there are strangers in their buildings and that other tenants are complaining about them. The "strangers" it turns out are Airbnb guests who are paying to use a tenant's apartment for a short period of time. Much like a hotel/motel.
The presence of Airbnb guests can be problematic for landlords. These guests are often "partying", often are in louder groups, are entering other units when they get "lost", use common area facilities and services more intensely, and basically treat the apartment building like a hotel. Regular full time tenants resent the change in feeling and atmosphere that these Airbnb guests bring with them and there are more instances of inappropriate behavior and hence a feeling that the building is less safe.
In this context, I'm asked, can the landlord stop a tenant from renting out their apartment on Airbnb?
The short answer, in my opinion, is an easy and unequivocal yes. My legal opinion is that it is illegal for tenants, whose tenancies are subject to the Ontario Residential Tenancies Act, to rent out their apartments on Airbnb--with, or without, a landlord's consent. The prohibition, of course, is not just in relation to Airbnb. The prohibition applies equally to any "sharing" site that operates in the manner of Airbnb.
As people reading this likely know, Airbnb provides a software platform that facilitates the renting of apartments, homes, (residential properties), to prospective short term guests. The platform is structured much like a hotel booking site and the terminology on the site makes one think of the hotel booking process. The owner of the apartment/condo/house makes some money renting out the home for a short period of time and the person renting it gets a place that is generally nicer and cheaper than a typical hotel room.
THE REASON IT'S ILLEGAL
It should be noted that my opinion about the illegality of renting out a unit on Airbnb applies only to tenants renting out their units. This opinion is not intended to speak to the legality of "owners" or commercial tenants renting out residential units on Airbnb.
The sections of the Residential Tenancies Act (RTA) that I will refer to are the following: s. 2(2)[definition of sub-let], s.97[sub-letting], s. 64 [termination-lawful right] and section 134(3) [illegal additional charges].
Section 2(2) of the RTA provides as follows:
a) the tenant vacates the rental unit;
b) the tenant gives one or more other persons the right to occupy the rental unit for a term ending on a specified date before the end of the tenant’s term or period; and
c) the tenant has the right to resume occupancy of the rental unit after that specified date.
Tenants do not have the legal right to sublet their apartments in Ontario without the consent of the landlord. Section 97 of the RTA deals with sub-letting a rental unit and it provides as follows:
A tenant may sublet a rental unit to another person with
the consent of the landlord ...
The noteworthy part of the section for the purpose of this opinion is the highlighted part and that is with respect to "consent". A tenant may not sublet a rental unit without first obtaining the consent of the landlord. The failure to obtain consent is contrary to the RTA and as it is a direct violation of the provisions of the RTA it may be characterized as an illegal act. An illegal act in the landlord and tenant context does not mean only a criminal act. An illegal act in Landlord and Tenant law is any act that is contrary to law.
Subletting without consent is also an infringement of a landlord’s lawful right, privilege or interest as recited in section 64 RTA as a ground for termination. This latter violation is the basis for serving an N5 on the tenant for renting out the unit on www.airbnb.ca . How subletting without consent is an interference with a lawful right, privilege or interest may be characterized in different ways. The obvious ways are that the landlord's economic interests are interfered with by affecting the other tenants' feeling in the building, changing the use of the building from apartment to hotel, and the presence of airbnb guests also changes the "risk" in the building likely impacting insurability.
ILLEGAL ACT
I think that the most powerful objection to a tenant renting out their unit via Airbnb is founded in the illegality of profiting from the inflated rental of the unit. Interestingly, I think that the sections I'm about to discuss can not be overcome or waived even with the landlord's consent.
Section 134(3) of the RTA provides as follows:
(a) sublet a rental unit for a rent that is payable by one or more subtenants and that is greater than the rent that is lawfully charged by the landlord for the rental unit;
(b) collect or require or attempt to collect or require from any person
any fee, premium, commission, bonus, penalty, key deposit, or other
like amount of money, for subletting a rental unit, for surrendering
occupancy of a rental unit or for otherwise parting with possession of
rental unit.
When you consider the point of renting out an apartment on Airbnb, you quickly realize that the tenant is doing so for the purpose of making money. The money that a tenant can make on Airbnb, over the course of a few weekends can pay the entirety of the rent and still leave the tenant with money left over. The daily, weekly, or monthly, rents obtained through Airbnb vastly exceed the rent that the tenant pays to the landlord.
Section 134, above, makes it clear that it is illegal for a tenant to sublet a rental unit for any sum of money that is greater than the lawful rent for the unit. Further, almost all of the advertisements I have read on Airbnb require the payment of a security deposit or other deposit. These are clearly illegal under section 134((3)(b).
As the amount being charged to Airbnb guests exceeds what is being charged to the tenant, the collection of that rent is illegal and contrary to the RTA. Interestingly, this is illegal, even if the landlord gave the tenant consent to sublet the unit.
The "sub-tenants" who rent from the tenant, through Airbnb, are entitled to apply to the Ontario Landlord and Tenant Board for a refund of the money that they paid that is in excess of the lawful monthly rent that was charged to the tenant. This is set out in section 135(3) which provides: " A subtenant may apply to the Board for an order under subsection 1 ... . Subsection 1 of section 135 provides that an application may be made for the return of money collected illegally.
In the context of this section it is not difficult to see the policy reason for preventing a tenant from being able to earn money from their rental unit in this way. Tenants would become landlords and speculate in rental units and ultimately, when subtenants had real problems the actual tenants could disappear without accountability.
Based on the foregoing it is my legal opinion that the activity of Ontario tenants renting out their units on www.airbnb.ca or similar websites, is not permissible and in fact is contrary to the Ontario Residential Tenancies Act.
Michael K. E. Thiele
www.Ottawalawyers.com
I don't know Ontario's tenancy legislation. Here in Vancouver about a quarter of units listed on AirBnB (according to City of Vancouver data that went to city council in the last month) are not entire units, but only an extra room or sometimes sharing a room. Where a tenant gets a roommate or shares their room, in BC that isn't considered a sublet. Instead, it's a licence to an occupant. Thus, I think that here the subletting provisions of the Act wouldn't be engaged by such a rental. What do you think of that sort of argument in the Ontario context?
ReplyDeleteHi Joshua: As you can see from my answer to the comment below, sharing an apartment with a roommate is not a "sublet" in Ontario either. The definition of sublet explicitly requires the tenant to move out of the unit. I know nothing about BC law, but based on what you say, it seems to be similar to Ontario.
DeleteI'll acknowledge that creating a "roommate" out of an Airbnb guest doesn't create a basis for termination on the theory of an illegal sublet on the assumption that the tenant actually does not vacate. If the "not vacating" is a sham then I do think the Ontario legislation has a way around the wording of any licence/contract that would appear to create a "roommate" arrangement or which would retain a right (vis a vis the Airbnb guest)for the tenant to be present in the unit during the Airbnb guest's stay.
As I mention in the response below, it is possible that the landlord's attack on the Airbnb guest situation could be supported in other sections of the RTA. To explore how that attack might occur we would need a specific fact scenario to apply the law against. As I mention briefly, query what the landlord might be able to do by characterizing the repeated short term roommates as the tenant running a bed & breakfast out of his unit---of course you need more than just a "bed & breakfast". Can the landlord establish that a "bed & breakfast" business affects insurability of the building? Do the bed & breakfast guests bother the other tenants? If any of these (or other) issues exist there are statutory grounds of termination aside from illegal sublet.
Thanks for the comment.
Michael K. E. Thiele
www.ottawalawyers.com
Thanks. Makes sense. The other thing I haven't really thought through here is that many BC municipalities have bylaws against renting accommodation for less than one month without a bed and breakfast permit. I don't know whether violation of a municipal bylaw could be used as a basis to evict in appropriate circumstances.
DeleteMichael...
ReplyDeleteGreat article - except for one thing.... A lot of AirBnB posts are not for the entire unit... if I have a bedroom available, there's nothing stopping me from renting that bedroom out short-term or long term, because I am still occupying the rest of the house/apartment.
Correct or incorrect?
Robert
Hi Robert: An interesting point. As you have gathered from my article, the "illegality" is premised on there being a sublet--as defined in the RTA. What you are describing with the tenant remaining in possession is not a sublet. Regardless of "airbnb", tenants have for ages advertised "shared accommodation" and have looked for roommates to share the costs of rent and living. Getting such a "roommate" through Airbnb or other platforms--even a newspaper--is not contrary to the RTA on the basis described in this article.
DeleteTenant's are entitled to have roommates. Short term or long term it doesn't matter. There is nothing illegal about having a roommate per se.
There might be other grounds to terminate your tenancy because of the roommate(s)--remember the RTA has numerous broad termination provisions such as the N5 (Substantial Interference with Reasonable Enjoyment), N6 & N7 (Impaired Safety and Illegal Act). The behavior of "roommates" can be the basis for the service of these other notices. Of course, if these people do nothing that permits the service of such a notice then you are likely fine--but this is a risk that you take if you have multiple short term roommates (I suspect that there will be a trouble maker or two among the bunch--even if it is only being loud or rowdy on vacation). Query whether a landlord could successfully serve an N5 if your numerous roommates are characterized as you running a "bed and breakfast" business out of your apartment (i.e. using the apartment for a purpose other than the "usual purposes"). Such an allegation ties into "substantial interference" and also "lawful right interest or privilege".
I do think that you are correct if there is not technically a sublet which of course requires the tenant not to vacate. However, it is a tricky business if the renting of only a room is a construct to avoid the "sublet" issue--i.e. you never happen to be home when the room is rented to the Airbnb guest. In such a construct I think you would have to be concerned about the Board's power in section 202 RTA to disregard the outward form of any transaction. Regardless of how you structure the arrangement on paper (and hence it doesn't technically look like a sublet) the Board could still find a sublet to have occurred using its power under section 202.
Generally, I don't mean to be off-putting in relation to legitimate roommates. Having a roommate to afford to pay rent and living expenses is exceptionally common for many many tenants. In fact it is often a necessity. For legitimate "roommate" relationships I don't think that there is any problem under the RTA except to the extent that the tenant is responsible for the actions of the roommate.
However, characterizing repeated short term hotel like guests through Airbnb advertising is still fraught with risk. Identifying what that risk is will depend on the what the complaint about your guests/roommates is. If your guests are perfectly quiet, you actually never leave, no one is bothered and in fact they are oblivious to what you are doing the likelihood is that you won't have a problem. However, if your serial roommates are somehow causing a disturbance I suspect the technicality of not vacating (to create the illegal sublet), is not going to prevent a Notice of Termination and a subsequent application for termination.
Thanks for this comment--it was a good one.
Michael K. E. Thiele
www.ottawalawyers.com
I asked my landlord if it would be okay for me to rent out my apartment while I was away from home for 5 months. He said no I will get evicted. Okay fine but is it okay for him to turn a whole an apartment building into an Air B&B. I am a tenant and had to put up with a bunch of fly by nighters. He tried to turn me into an Air B&B too. Goes into my apartment when I'm not home to install an ethernet cable with a Bell tv box after I told him not to then expects me to pay him for internet and tv but threatened to kick me out for calling Bell technical support.
DeleteIt is perfectly reasonable for you to want to sublet your unit for 5 months. In fact, that time period is rather classic for subletting--i.e. the perfect time period. The landlord's refusal allows you options at the LTB and you can seek orders for this unreasonable refusal. A landlord is not permitted to simply say "no" to a sublet request.
DeleteHi Michael, thanks for the article.
DeleteI have additional concern about using my spare room for Airbnb in the unit where I am the tenant and currently living. There is this term in my rental contract with the landlord: “The Leased Premises shall be occupied by the Tenant(s) for the purposes of residential occupation only. No business other than that requiring a simple home office shall be operated out of the unit. The Tenant(s) shall not use the rental unit or complex for any illegal activity. The Tenant(s) shall not use the rental unit or complex for rental such as Airbnb, VRBO or other similar sharing services.
If the predominant use by the Tenant(s) is other than as a residential tenancy, then the Residential Tenancies Act does not apply”. My question is, will my Airbnb activity be considered as violating the contract? If the amount collected from my Airbnb activity exceeds the rent of the unit, will that be considered illegal?
Thank you!
The use of rental units for Airbnb has become rather complicated. At the government level you have cities passing bylaws addressing short term rentals and creating rules around it. If your area has something like that applying then you need to make sure you are in compliance (if you airbnb a room) because a breach of a bylaw would indeed constitute an illegal act under the RTA and be a ground for termination and eviction. RTA does not require an illegal act to be a criminal act--breach of law is enough.
DeleteBeyond that, are you in a condo? Condo's have been making rules restricting or prohibiting Airbnb. Take a look. Condo rules intersect oddly with LLT law and rules.
After that, I think, you are simply doing some interpretation of what the lease clauses mean and need to determine whether these clauses are legal or void under the RTA if the clauses purport to restrict what you want to do.
I can't tell from your question whether you are exactly quoting your lease clauses or paraphrasing. Is everything between the quotation marks in the lease--it is just odd in the paragraph break? Anyway, presuming it is (and note this is just a gut reaction and for a proper legal opinion go speak with a lawyer or paralegal who (as would I) have a bunch more questions for you before offering an actual legal opinion), I see compliance with the first sentence by you living there whether or not you Airbnb a bedroom. Even the Airbnb person is using the bedroom for residential occupation. The next sentence ("no other business") is in my view vague and meaningless. Renting a room via Airbnb--is that a "business"? I don't think so. Taking in a roommate to share expenses to afford the rent--is that a business? I don't think so--and we clearly know a landlord can't stop that. Is a "home office" a business---weirdly, the landlord seems to think so as he equates it with one. The next sentence: "...not use ... illegal...", well that is the law anyway so it is a redundant. The next sense "...shall not use ... sharing services", that to me means you will not vacate the rental unit and run an Airbnb (or similar) business out of the unit. I do not think it captures (or prohibits) what you describe--that being you reside in the unit, you offer a bedroom on Airbnb to guests, but you literally share the space with the guests and you are literally present in the unit living there. It is like "house guests". If that is what you're doing then I don't see this purported restriction as applying to you. If you don't vacate the unit this is not an illegal sublet. It is effectively the same as taking in a roommate to share the cost of living. All of the "problems" associated with units being used like hotel rooms are absent in what you describe because you are there to keep the rowdy and stupid under control. The way people will come to your unit is not much different than if you had tons of friends, classmates, coming to your unit. It's hard to see the real basis to object. In short, I think the clause is prohibiting and aiming to prevent you from renting, living elsewhere and using the unit as a hotel for people you connect with via Airbnb. While it is good to spell this out--I think that activity is contrary to the RTA even without this sentence.
DeleteThe next sentence" "...predominant use ...". This is a nonsense sentence. If the RTA applies (at any point) then the Landlord has zero ability to say it doesn't based on some criteria he cares to impose. If you do something that is incompatible with the lease, the RTA, manner of use--well that becomes an issue for the Landlord and Tenant Board and proceedings there. It does not mean the RTA does not apply. This sentence is ridiculous.
As for your earning question. I think you are probably fine if you rent it as described. You provide more to your guests than what the landlord is renting to you. Your place is furnished, you provide beds, linens, food?, hosting, etc.. The money you get--is more than just rent. There is no exact equivalency to the rent you pay the landlord.
That being said, you can make and envision extremes that turn this analysis on its head. If you crammed a large number of people into your unit--imagine creating a youth hostel with stacked bunk beds in your living room--making many times what you pay in rent--but "technically" still live in the unit by occupying a broom closet--well, that kind of contrivance begs an analysis that favours the landlord. So, ultimately, facts will matter!
Good luck
www.ottawalawyers.com
Hi Michael,
ReplyDeleteThank you for the great blog, it's extremely useful. I bought a property last year in Windsor ON with the intention of renting it out and had security cameras installed outside the prooerty covering the front driveway, door and both side entrances.
The property was vacant for around 4 months after the old tenant moved out. During this period I had enabled motion detection to send the property an email alert.
My previous tenant never had any issues with this, however my new tenant who moved in on the 16th of this month unplugged the ethernet feed claiming he wasn't sure what it was for. When the mangement company told him it was for the cameras he reluctantly plugged it back in saying he didn't want to be spied upon.
The lease he signed only has him, three kids and his wife on it.
Since he moved in various friends and family have been helping him with the move.
It has now come to my attention after one of the side entrance cameras kept triggering an alert that he has a guest living in the lower part of the property which is zoned as a single family home but has three bedrooms, a kitchen, bath and living room on each floor with a shared laundry with entrances from both floors.
Given that it's been less than two weeks since the lease was signed, would it be unreasonable to expect this guest to be part of the lease?
Lastly, he is claiming he is being spied upon and will unplug the security system. Is he allowed to do so or does that fall under vandalism?
Hi: What an interesting question. The Residential Tenancies Act is not very helpful when it comes to this issue. Privacy is dealt with in section 25 of the RTA and that is very very limited, speaking only to the issue of entering a rental property. With respect to camera's then, I think the Landlord and Tenant Board would analyze the issue with respect to the unique circumstances of this particular property. A tenant is entitled to quiet enjoyment of the rental unit and you are in fact required to provide that to the tenant. A camera that allows you to track the comings and goings of a particular tenant can be disquieting to that tenant and I think the Board would find this a violation of the tenant's right to quiet enjoyment. To justify the cameras, you would need to explain why the violation of the tenant's right to quiet enjoyment is legitimately infringed with these cameras. What is it that justifies these cameras? Simply wanting to watch over your property is likely not a strong enough answer in my view. Do the camera's operate as some kind of security service? Do you have an inordinate drug trade, illegal activity that these cameras are dissuading? I think that cameras on a multi-unit building is very different than camera's on a single unit building. If the tenant's don't want the possible law enforcement uses of the cameras I don't think the Board would force them to live with it. Perhaps if the lease set out that the property is monitored by cameras, sets out that this will continue throughout the tenancy, that they are in place for insurance reasons, crime reduction reasons, etc., then perhaps you could by contract make this a lawful right that you could enforce. Even then, though, I think a contractual clause of this nature could be challenged as void due to it unreasonably limiting the tenant's right to quiet enjoyment.
DeleteWith respect to the tenant having roommates. There is very little that you can do about that. In fact, you can get yourself into some significant trouble if you interfere with the tenant's relationships, guests, and other occupants.
Michael K. E. Thiele
www.ottawalawyers.com
Awesome blog, Michael. This is usually my first stop when looking things up. I can only hope to one day possess your knowledge and expertise on this subject.
ReplyDeleteHow would the LTB/RTA deal with the guests of an airbnb rental, i.e. if a guest does not leave when they are supposed to can the "landlord" just change the locks, call the cops, or would they have to go through the LTB? What about if the guest rented out a place for a long-term like over 6 months? The RTA isn't so clear about that in the exemptions covered in s. 5.
Thanks!
Hi: The question will be whether the RTA applies to the rental of the unit. I haven't looked, but does the Airbnb contract/site/app set out the nature of the rental? Of the section 5 exemptions I'd think you're covered under section 5(a). Note that the various types of institutions there don't have actual definitions in the statute---what exactly is a "tourist home"? And how exactly is it different from a "vacation home"?
DeleteSubject always to unusual representations and unexpected facts, it would seem to me that most Airbnb rentals are time limited, understood to be temporary, and be in the nature of a hotel/Inn. I would expect the rules of being an Innkeeper to apply. Further, why would anyone over-hold on an Airbnb unit which I expect would be significantly more expensive than a monthly rent?
Michael K. E. Thiele
www.ottawalawyers.com
Michael - here is a spin on the AirBNB "quiet enjoyment" impacts.
ReplyDeleteMy family with 2 small children 1 & 4, live in the a 3-unit house with a shared entrance way, and shared outdoor space (back yard and front deck). Our downstairs neighbours recently moved out and a new 'tenant' moved in. We just found out that he is AirBNB'ing the unit full time (a lockbox was installed on our front porch, lots of strange visitors for our new neighbour).
The landlord just told us he knows and agreed to it, but never informed any of the other tenants. We keep personal items (like our stroller) in the shared front hall and don't usually lock our inside front door. So at least a 'heads up' would have been nice, but more importantly we're very unhappy having random people with access to our house and shared spaces, using our outdoor furniture, bumping into them in the hall or the yard and having to explain to my four year old who is going into our house. How do we know who is a legit renter?
We and the 3rd unit tenant all feel that our quiet enjoyment is impacted, but not sure what to do about it. I certainly don't want to wait for an 'incident' to happen...
Hi: This is an interesting question mainly because it involves Airbnb and as we know, Airbnb units are in the news for many reasons these days.
DeleteThat being said, I don't think that the analysis and strategy for taking your landlord to task is all that difficult. The things that are happening with Airbnb guests, the presence of strangers in the complex, and your fears are well documented realities of properties turning into Airbnbs. Often enough, it is a landlord using the effects of renting to strangers to prevent tenants from doing Airbnb.
In my view, the basis for your complaint against the landlord lies in section 22 RTA. This section sets out your landlord's responsibility. Copy and paste this link: https://www.canlii.org/en/on/laws/stat/so-2006-c-17/latest/so-2006-c-17.html?autocompleteStr=res&autocompletePos=1#sec22
As you can see from Section 22 the landlord is not to interfere with your reasonable enjoyment of the rental unit or the residential complex. Is renting out a unit as an Airbnb unit breaching section 22? I certainly think so based on what you describe. Maybe in a larger apartment building it would be fine. But in a small building where neighbours are meant to interact, socialize and share common space (and furniture), having a constant stream of strangers is problematic.
I think that you can build a case around section 22 being breached. You use a T2 application to raise the issues at the Board. There are a range of remedies available but I suspect that you will be especially interested in the Board's power to order the landlord to stop the offending behaviour.
I'll be very interested if you give this case a shot. If you collect the evidence and tell the story properly I think it is a very strong case. Remember to highlight that there are certain expectations when renting and the character of the premises informs, I think, the nature of the tenancy and your relationship with the space. The landlord is not entitled to unilaterally change that as it is a part of your lease. You went from a living arrangement where you could expect regular interaction with known persons to living in a hotel environment. That to me is a clear and unilateral change of the lease terms and without your consent it is not permitted.
Good luck, please let me know how it goes if you take this to the LTB.
Michael K. E. Thiele
www.ottawalawyers.com
Thanks - I don't relish a trip to the LTB, but there has been an explosion of AirBNB in our hood and those surrounding it listing at 2-3x market rents. Dozens of units of the market in just a few low-rise blocks. This one-bed is listed at $112/night. For a landlord who bought the house 12+ years ago and just turned over a rent-controlled unit and could set rent at market rates, I have no sympathy. Heck our rent alone almost certainly pays the full mortgage - the extra $ from AirBNB is pure gravy.
ReplyDeleteHi Michael,
ReplyDeleteWith respect to s. 134, does the lawful rent calculation go per diem? Because if a tenant ends up subleasing on Airbnb for a total of 10 days at $100/night, the total he has made is $1,000.00. If the rent is $1,500.00 per month he has not charged more than that, but on a per diem basis he has charged significantly more.
How does the calculation work?
Thank you.
Hi: As far as I can tell there is no explicit instruction on how to deal with the issue you raise. When I look at s. 134(3)(a), I see a per diem calculation being implied by the words "charged by the landlord for the rental unit". As I read it, the question to determine is what amount is being charged by the landlord for the unit for the time period of the sublet. Hence, if the sublet is two nights what amount is being charged by the landlord for two nights. If the sublet is 10 nights at $100 per night what amount is being charged by the landlord to the actual tenant for those 10 days. To me, this flows from the plain reading of the section but if it is a bit "fuzzy" I think a purposive reading of the statutory language by any adjudicator would end up with this methodology. All that to say---yes, I think per diem (daily) rent is the way to do this.
DeleteMichael K. E. Thiele
www.ottawalawyers.com
Thanks.
DeleteSince one can not sublease without the landlord's consent, but the landlord can not arbitrarily or unreasonably withhold consent, would airbnb be a reasonable reason for the landlord to withhold consent?
Hi: The request for consent to sublet is with respect to a specific person and not generically to sublet as an airbnb. A tenant can not properly ask a landlord to sublet via Airbnb and never actually put forward the Airbnb guests name, details, etc.. Refusing Airbnb subletting is easily justifiable. Airbnb rentals bring all sorts of problems to a rental complex and I don't think there is anyone who would argue that to refuse Airbnb rentals is unreasonable.
DeleteMichael K. E. Thiele
www.ottawalawyers.com
Thanks, again.
Deleteyou addressed above about if the tenant isn't vacating and therefore it is not a case of subletting.
Does that mean that if a tenant stays on and only rents out one bedroom, the tenant can theoretically charge way more than they pay for rent but would be able to because they don't fall under sublet?
Hi: The definition of "sublet" requires the tenant to vacate the unit. If the tenant does not vacate and instead brings someone into the unit that person is a visitor, guest, roommate, or something of that nature but not a sub-tenant. Can a tenant charge a guest to stay over-night? The prohibition in s. 134(3) relates to a subtenancy and does not speak to charging a guest or roommate when there is no subtenancy. Is there anything else illegal or contrary to the RTA in a tenant getting money from a visitor or guest for staying in the unit. Not explicitly in the RTA. If the getting of money from a guest turned into a "guest house" type of business where the tenant remains in possession but regularly starts renting out rooms to different persons (i.e. like a hotel), the landlord might start looking at any problems being caused by the guests that would allow a Notice of Termination like an N5, N6, or N7 to be served.
DeleteMichael K. E. Thiele
www.ottawalawyers.com
Thank you for your answers, Michael.
DeleteMuch appreciated.
I generally like your articles Michael, but in this case I think you are mistaken in your interpretation.
ReplyDeleteIt would come down to what constitutes "vacating". Vacating, in the RTA, refers to an annulment of the tenant's interest in the property, not merely leaving the premises. If it were interpreted as you are asserting here, then a landlord could issue a notice of termination and dispose of all the tenant's property while they were on vacation in accordance with S.41. Similarly, someone who rents an apartment as a secondary residence does not vacate by returning to their primary residence.
Hi: Thanks for the comment. I don't think we can agree on this though I am not sure that the "vacating" we are each talking about is confined to the same legal concept. Are you equating "vacating" with "abandonment"? Certainly those two concepts are not the same though I imagine it would be hard to have an abandonment without vacating. You reference section 41 that speaks to dealing with abandoned property. Mention should then be had, as well, to section 79 which speaks to "abandonment" of a rental unit. Abandonment and vacating are different concepts. You suggest that "vacating" refers to an annulment of the tenant's interest in the property---I don't agree. In fact, the entire concept of sub-letting (which includes vacating) by definition confirms that the tenant retains an interest in the premises (and remains liable to the landlord during the term of the sublet (legal or not). Various authors (including Jack Fleming, Ontario Landlord and Tenant Law Practice 2019, Commentary at section 79) clearly state that putting someone into possession of the rental unit does not amount to abandonment and that the other remedies in the RTA would apply (i.e. section 100 and 104).
DeleteFor the tenant who has gone on vacation the landlord could never equate "vacating" for the trip with "abandonment". By definition, abandonment is impossible to occur if the rent is paid (s.2(3)RTA).
In summary then, I don't think that what I've written in the article gets you to a finding of "abandonment" with the consequences of that legal determination. Instead, the article gets you to an illegal sub-let (without consent) which then gets you to the other sections mentioned as a basis for termination.
An interesting twist and probably a further extension of what is in the article I recently had a discussion with a rather senior practitioner whose view is that the illegal sublet can occur within the rental unit if there is even only a vacating of certain space within the rental unit. I have a tough time with that idea but he was rather insistent that a tenant surrendering any part of a rental unit (as in an Airbnb rental) is also an illegal sublet in that the "vacating" part of the definition in the RTA is met. At first the argument struck me as severely over-reaching but as you think about it you can imagine various contrived arrangements designed to keep a false or peripheral presence in the rental unit to preclude a finding of illegal sublet (based on the definition). Should it be possible to rent a portion of a rental unit via Airbnb, maintain control over or presence in another portion of the rental unit and therefore not be caught by the subletting provisions? In one sense the argument makes sense---but then what about taking in roommates to share expenses--is that not also then an illegal sublet?
Anyway, the thanks for the comment. It's not too often that I can this kind of comment and it is fun to debate!
Michael K. E. Thiele
www.ottawalawyers.com
Thank you for your thoughtful reply.
DeleteThe reason I brought up s.41 is that it highlights the unique nature of 'vacate'. As you say, it's not abandonment, yet at the same time s.39 uses them as similar concepts ('the tenant has vacated or abandoned the unit;').
Looking at 'vacate' through the lens of s.41, if rent is paid making the unit not abandoned, at what point can it be claimed to be 'vacated'? The absence of the tenant would not be sufficient to begin disposing of property (vacation, not primary residence, etc) so there must be some other element involved in satisfying the 'vacate' criteria.
That criteria, to me, is a permanent (N9) or temporary (sublet) annulment of tenancy rights.
S.99 'a tenant who has sublet a rental unit, as if the tenant were the landlord and the subtenant were the tenant' shows that a subleter does become a tenant and gains tenancy rights for the purpose of the act. While the tenant retains 'benefits and liability' they do not regain their tenancy until the sublet is complete.
That is the key point for me. With AirBnB no change in tenancy occurs. AirBnB guests are occupants/roommates for the purpose of the RTA not subletting tenants because the tenant does not vacate their tenancy rights to the AirBnB guest. They retain those rights while allowing individuals to occupy the space they have leased.
Thanks for the discussion!
Hi Michael,
ReplyDeleteI have a question about subletting, but not as it pertains to Air BnB. I apologize if this is the wrong forum but I could not find another post on your blog that was more relevant.
I am renting a unit in a condo starting September 1st. The unit has a designated parking space which is owned by the landlord and the space is included in my lease. I don't have a vehicle so it was my intention to rent out the parking space. The building has a policy that allows a tenant to sublet their designated parking space, so long as the sublessee is another tenant of the building.
I asked the landlord about renting out the space but they indicated that they do not consent due to liability and insurance issues. First, I am wondering if the landlord even has a right to refuse consent in this case, as I am unsure if parking spaces are captured by the restrictions on subletting in the RTA. My understanding is that so long as the use of the parking space does not interfere with reasonable enjoyment of the premises by other tenants/the landlord, the tenant can use the space as they please.
If I'm wrong about that, is it worth applying to the board for an order forcing the landlord to consent? It seems patently unreasonable to me to refuse, as I can't imagine what the possible liability issues could be. Or, is this a case where it is better to act now and ask for forgiveness later, and just go ahead and rent out the space despite the lack of consent.
It is a frustrating situation because the rent is much higher as a result of the included parking space, and I would still be paying the landlord the same amount in rent if I found someone to sublet the parking space.
Thanks for your consideration Michael.
Hi: This is a rather interesting question and I can't say that I've ever had this exact scenario before. Given that this is a condo you have the potential application of Condo rules, bylaws, declaration, that may impact what you can do with the parking space--though any such rule I expect would be applied equally to owners and tenants. I'll leave you to investigate the Condo requirements/limitations without comment.
DeleteIn a straight application of Residential Tenancies law I think you are free to rent out the parking space, to third parties, without needing the permission or consent of the landlord. I don't think that the landlord has any say over this. It isn't (in my view) a sublet because you are not vacating the rental unit--which is a necessary element in a sublet. I find it difficult to see this as anything different than space sharing and bringing in a roommate to help defray the costs of renting (which is perfectly legal).
I think you are correct when saying that you need to be concerned about "reasonable enjoyment". In fact, you need to be concerned about any conduct/behaviour of the person that you let park in the space. They will be your invitee and you are responsible for what they might do. Also, you will be responsible for what anyone they might bring on the property might do. This will include intentional acts and negligence. Silly example--but to make the point--say you rent the space to DRIVER. DRIVER parks in garage with DOG OWNER who has a dog (of course). The dog, uncharacteristically, bites someone in the garage. If DOG OWNER is uninsured or under-insured, and if DRIVER has no coverage, the search for deep pockets may indeed lead back to you. You will have permitted the DRIVER and hence the DOG OWNER to be on the property (by giving key, pass-card, access code) and you are arguably responsible for the actions of those persons and the dog. Presumably your tenant's insurance will cover you for any claim made though it might be worth asking your broker if your insurance covers you for anything that might happen if the person renting the parking spot does cause damage etc.. Ask your broker if you would be covered by acts of your renter. What liability issue might there be? What if the car catches fire due to a mechanical issue. What if the driver is reckless and hits someone. What if, what if, what if---let your imagination roam wild. Some things are reasonably possible and some are obviously far fetched.
Aside from the foregoing--I'm wondering what else might play out. Presuming that the landlord becomes aware of the renting out of the spot I wonder if a legally creative landlord might argue "sublet" or unauthorized transfer on the basis that the parking spot and the residential unit are separately titled? I don't know if that is the case in your condo--but indeed, sometimes the parking space and the residential unit are separate such that you can sell the parking without selling the residential unit. Does this suggest two leases in one? I think that's far-fetched and given that the lease includes parking you're probably not going to face that kind of argument, but its an idea.
What kind of application could the landlord bring? Unauthorized transfer is the illegal sublet--that I think is doomed to fail. He could serve an N5 (substantial interference or Lawful right interest or privilege) and follow it up with an L2 application to the Board. Even if he did, I imagine the LTB wouldn't terminate your tenancy even if you are found to be in the wrong--my guess is that the LTB would make a conditional Order preserving the tenancy if you stopped renting out the spot. It difficult to see how the mere fact of renting out the spot entitles the landlord to serve the N5. Of course, if your parking space renter turns out to be a nightmare and does something terribly stupid, illegal, dangerous, that could lead to termination of your residential tenancy.
The only other angle that I can think to explore is whether you end up making money from the parking spot. "Making money" is frowned upon and this includes making more than what you're paying which is prohibited. But again, this is typically an issue only when there is an illegal sublet and not in a space sharing arrangement.
DeleteSo, after all of that, I think the facts you describe would allow you to rent the spot without the landlord's consent. The Condo rules etc., are worth looking into--check to ensure that renting the parking to third parties not resident in the building is permitted.
Lastly, and it bears thinking about. If you do decide to rent to someone you might want to prepare an agreement setting out expectations, what can and can't be parked, behaviour, termination provisions, rent amount, proof of insurance for car, ingress and egress from building, complying with condo rules and requirements, confirmation that from time to time parking lot may be closed--for cleaning, service etc. and setting out how that effects the rent, that if parking unavailable you won't supply replacement spot nor cover cost of alternate spot, and perhaps you should over-all limit liability to the cost of one month's parking for any other incident that may occur on the property.
Good luck
Michael K. E. Thiele
www.ottawalawyers.com
Hi Michael,
DeleteThank you very much for your thoughtful and detailed reply.
I have confirmed that the Condo by-laws permit such an arrangement, so long as the renter is another tenant of the building, so I do believe I am onside as far as the Condo rules are concerned.
I appreciate your input regarding the landlord's potential recourse at the LTB. Ultimately, I think we will go ahead with renting out the spot without our landlord's consent, however I will wait until after we've received our keys and have taken possession of the unit, just to be safe. I understand that we are opening ourselves to a host of potential liability issues, but that's also what baffles me about the landlord's position since she seems to be presuming that the liability will fall on her feet for any actions of the renter. I am confident though that restricting access to other tenants of the building will alleviate any concerns over a nightmare parking space renter.
As for whether the parking space and residential unit are separately titled, my understanding is that space is assigned exclusively as part of the unit, and as you said, it was certainly referenced in the lease as such.
Since the parking spot is included in the cost of our rent, it is difficult to say whether we'd be "making money" by renting it out. I imagine that the owner paid a substantial sum for a unit that includes the parking space, but I would have no way of quantifying that. From what I've read, the going rate for a parking spot in the area is $150 a month, so for us it would essentially be a rebate on our rent payment - we wouldn't be making a profit, per se.
And thank you very much for your suggestions re: the contractual agreement between us and the prospective renter, I will certainly take all of those points into consideration.
It would be nice if there was some authority I could send to my landlord to make her change her mind. I've tried to gently suggest that she's in the wrong, but she won't budge. Unfortunately, I get the sense that the topic is too muddled for me to convince her definitively. If only the LTB offered opinions on such matters without the need to adjudicate them...
Thanks again Michael for your input and I will be sure to post again with any relevant update.
What if you live in the unit and Airbnb one of the rooms?
ReplyDeleteIf you are in a regular apartment building (not a condo), and are otherwise covered by the RTA it will be difficult for your landlord to make an issue of this. If you move out to let other people AirBnB then you have a problem. But if you are short term renting out a bedroom while you remain in the unit then you are not breaking any specific rules under the RTA.
DeleteHi Michael, I am a residential tenant in a small commercial building in Toronto owned by a big real estate company (first 2 floors are commercial and third floor is residential). I travel to Ottawa to visit my folks for a week every month and have been renting out my place on Airbnb during that week. It's been going great but I realize that this is not legal since I have not asked the landlord/company permission (which is a clause in my RTA) and I am scared of getting evicted if they find out. I am only doing this to recover some of the rent money that I pay while not being at the apartment, this is not a business for me. If I ask for permission, I don't think this huge company would allow it. Any advice?
ReplyDeleteSadly, I don't think I can offer you anything that lets you continue renting your unit on Airbnb without risking legal action against you. That being said, your question can only be properly answered by taking a look at your lease and the actual wording of the Airbnb clauses. A close legal analysis of the clauses would determine whether you need to ask for permission at all. The circumstances you describe are not what would typically be objected to by landlords. The big objection is to tenants who rent a unit, never actually live there, furnish it with basic furniture and then Airbnb the unit as a business. That clearly isn't what you are doing. Does it make a difference? Perhaps. The wording of the lease clauses will matter. Also, it is always important to remember that landlords are NOT free to include just any kind of lease clauses that they wish in their leases. Section 4 of the Residential Tenancies Act makes void any clause in a lease that contravenes the Residential Tenancies Act. Is it possible that your lease clause (presuming it prohibits what you are doing), is void as against the RTA? How could that be you ask? Well, an aspect of every tenancy agreement is "quiet enjoyment" or as now described in the RTA as "reasonable enjoyment"--meaning, a landlord must give you that as part of every lease. Are we at a stage in Ontario where Airbnb'ing your unit in the circumstances that you are doing constitutes a part of what is "quiet enjoyment/ reasonable enjoyment". I don't actually think that this is a stretch. Housing costs are huge, post November 15, 2018 rental units have no limits on rent increases, inflation is rising, and making ends meet is arguably more difficult today. Also, it seems that "gig work" is a reality in the modern economy as part of what people do to support themselves. Contextualize that story and isn't what you're doing consistent with this? Shouldn't the law recognize that this part of what you are allowed to do as a tenant to get by? Certainly, the law already allows you to have "roommates" without needing permission from the landlord and the reason for doing so is often the same reason that you are Airbnb'ing.
DeleteSo, that being said, more legal analysis of actual paperwork is needed. The arguments supporting Airbnb bans in rental units are "real" and compelling, BUT you may have an angle based on the specifics of what you are doing compared to those who are doing the worst kind of Airbnb subletting.
Thank you for your promt advice Michael! Your insight into the "reasonable enjoyment" part of the RTA seems quite fitting to me given the current economy and housing situation. I now understand the angle I could go with if I end up in a spot where I need to have a difficult conversation with the property manager.
DeleteThe Guests section in part 3 of my RTA also has some interresting wording: "If a tenant rents their whole unit to someone else (e.g. short-term rental), this person is not a “guest”. The tenant may have to get the landlord’s permission."
I find this interesting because it does not say that I MUST get permission, unlike the sublet portion of the RTA. Additionnally, the building is labelled as a Condo in the RTA, but I never received any Condo rules or info. So if Airbnb'ing is against condo rules, I could not have known. Do you have any advice based on these addtional details?
To vacate usually specifies to leave a property void of belongings so if a tenant “sublets” their unit but leaves their bed and plates and other personal items then they technically have not vacated……
ReplyDeleteWhat you suggest as determinative of whether a tenant has vacated or not really doesn't fly in the illegal sublet context. A tenant could leave their entire unit intact and leave their most personal items there---but if they leave the unit and rent it out to a third party that is an illegal sublet if permission has not been obtained. That's how the case law goes. Note, however, specific context is important. If a landlord is trying to show abandonment so that he can take over a unit without legal process it would be a serious mistake to discount the presence of the tenant's personal property. In these circumstances the fact that the unit is still full of the tenant's personal belongings would suggest that they haven't abandoned (i.e. to vacated).
Delete