Brian Horlick B.COMM., B.C.L., LL.B., ACCI, FCCI Partner Horlick Levitt Di Lella LLP
Alexander Etkin Articling Student Horlick Levitt Di Lella LLP
Short Term Tenancies
In With the Residents, Out With the Transients Tribunal Rules in Favour of City of Toronto’s Short-Term Rental By-Laws
On November 18, 2019, the Local Planning Appeal Tribunal (LPAT) upheld the By-Laws. Collectively, the two By-Laws establish a new regulatory framework for short-term rentals and amend various municipal zoning by-laws. The LPAT ruling provides, amongst other things, that: • Short-term rentals, defined as all or part of a dwelling unit used to provide sleeping accommodations for any rental period that is fewer than 28 consecutive days, are permitted if offered within a host’s principal residence. • A principal residence is the residence where a person lives for the majority of the year. • Both owners and tenants can partici-
pate as short-term rental hosts. • Properties in both residential and mixed-use zones are eligible for use as a short-term rental. • Residents of secondary suites and laneway suites may also participate as hosts, as long as the suite is their primary residence. • Hosts who rent out their entire house or apartment may only do so for up to 180 nights per year. • Hosts who rent out three or fewer bedrooms in their residence will not face an annual limit on rental nights. As a result of the Tribunal’s decision, dedicated short-term rentals offered within investment properties (also known as “ghost hotels”) are prohibited. The Tribunal concluded that ghost hotels, which are operated out of a residence where the owner or tenant is not ordinarily a resident, constitute a commercial use of land that is zoned for residential purposes. New Restrictions and Requirements The By-Laws impose new rules for short-
term rental hosts. Hosts will be required to register with the City and pay an annual $50 licensing fee. In addition, hosts must pay a 4 percent Municipal Accommodation Tax (MAT) on all short-term rentals. Hosts will also be required to provide the City with government-issued identification to prove that the short-term rental is the host’s principal residence. A host’s contact information and details of the rental must also be provided to the City upon request. Lastly, any host who advertises a shortterm rental must ensure that the host’s registration number issued by the City’s Municipal Licensing and Standards body appears on the advertisement. Airbnb and other short-term rental platforms and brokerages will also feel an impact from the By-Laws. The By-Laws require that short-term rental companies pay a one-time fee of $5,000 to be licensed and an ongoing fee of $1 for every night booked through their platform. Furthermore, these companies will be required to establish and implement a compliance system to ensure that all hosts are propCONDOVOICE SPRING 2020
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ILLUSTRATION BY JASON SCHNEIDER
Condominium stakeholders and short-term accommodation websites such as Airbnb will experience substantial changes after a group of landlords failed in their efforts to challenge the City of Toronto’s (the “City”) zoning by-law amendments with respect to short-term rentals (the “By-Laws”).