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Can I rent my home to travellers?

Opponents of Airbnb rally in New York January 20, 2015. REUTERS/Shannon Stapleton

Savvy travellers are always looking to save a buck, and the relatively young industry of home or apartment rental through sites like Airbnb or HomeAway has become very popular.

It’s also a boon for hosts, who can make extra cash renting their place. However, there are plenty of risks, legal and otherwise, in opening your own mini-hotel.

Naturally, there’s some risk in letting strangers into your home, since there’s no guarantee they’ll be honest and well-behaved. In 2015, raucous renters trashed a Calgary family’s home in what was described as a “drug-induced orgy,” which caused around $75,000 in damages.

Even if your renters are responsible people, Airbnb-style renting can invite plenty of legal and insurance problems.

At best, it’s a quasi-legal industry and some jurisdictions are cracking down. Quebec and British Columbia are both considering imposing taxes and regulations similar to those governing hotels. Toronto has imposed restrictions, but they will not come into force unless they are approved by the Ontario Municipal Board. The soonest they could take effect would be sometime in 2019.

While Airbnb-style renting may be technically legal in your area, you may still be putting yourself in peril. For starters, there’s a good chance such renting violates your own lease or your governing Residential Tenancies Act in multiple ways.

Each province has different laws governing leases and rental properties, and the Airbnb model contravenes many of those, including:

Subletting: Short-term rentals aren’t necessarily against the law in your province, but many condos and leases forbid them. Also, many provinces require a tenant to get their landlord’s permission to sublet. A surreptitious sublet can get you evicted.

Also, the original tenant remains liable even if another person has sublet the property. So if you rent your place to a traveler and they damage it, the landlord could still charge you for damage, or deduct the repair cost from your security deposit.

Similarly, you may not be allowed to sublet a mortgaged property. It’s not illegal, but it would depend on your own mortgage agreement and violating that covenant could be mortgage fraud. That could also get you evicted or allow your lender to call in the mortgage, meaning you’ve got to pay it all off right away.

Rate: it may be illegal to sublet a place for more than your landlord is charging you. If your rent is $1,000 a month, you’re paying about $33 per day. Therefore, you can’t charge any more than that to a traveler. Some jurisdictions like B.C. allow subletting for profit but many others forbid it.

Insurance: Insurance companies probably won’t like that you’re letting strangers live in your place, but you’d better be honest about it. It may lead the company to raise your premium, but if some disaster occurs while you have travelers staying there, it could lead an insurer to deny you coverage.

Read more:

Residential Tenancies Act (Ontario)

Assigning and Subletting (B.C.) 

Toronto Home Rental Rule Proposals