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Short-term Rental

Welcome to the CAO’s guided steps to common issues. The CAO provides the information, tools, and templates on these pages to help condominium communities better understand issues and work together to resolve them collaboratively before they escalate into disputes. For situations where condo communities are unable to resolve their issues collaboratively, the CAO also provides information on the next steps they can take.

If you have any questions about any of the information on the CAO’s guided steps to common issues, please contact us directly.

Short-term Rental

As the sharing economy becomes more and more popular, many people have begun using their condos for short-term rentals through services like Airbnb. Short-term rentals can sometimes lead to issues in condo communities, as people renting condos may be disruptive to other residents and may not follow the condo rules.

Examples of short-term rental disputes include:

  • Renters causing issues within the building;
  • An owner or resident wanting to use their condo for short-term rentals, but there may be a restriction in the condo’s declaration or rules against it;
  • An owner or resident continues to use their condo for short-term rentals despite a prohibition in the condo’s declaration or rules against it;
  • An owner or resident was originally told they could host short-term rentals, but the board has since changed the rule;
  • There is a security concern about residents sharing keys with short-term rental tenants.

It is important to note that there is a difference between short and longer-term rentals. Short-term rentals are usually for a period of a few days and a month, while longer term rentals are usually for a period of a few months and years. The rules can be very different for short and long-term rentals.

To find out more, read about important information for landlords.

An owner or resident’s ability to use their condo for short term rentals will usually depend on your condo corporation’s documents, including the declaration, by-laws, and rules.

Section 7 of the Condominium Act, 1998 (“the Act”) describes the contents of a condo declaration. A declaration can include conditions or restrictions on the occupation and use of the units. For example, the declaration may say that the units can only be used for “private single-families.” If that is the case, owners or residents may not be permitted to use their condo for short term rentals.

Your condo corporation’s rules may also restrict your ability to use your condo for short term rentals. Specifically, section 58 of the Act permits condo boards to make rules which promote the safety, security, or welfare of the owners, and to prevent interference with the use and enjoyment of common elements, units, and assets of the corporation.

Many condo boards have begun to introduce rules to prevent the use of condo units for short term rentals. Moreover, a recent Ontario court ruling has confirmed that condo boards can prevent owners from using their unit for short term rentals by passing a rule.

Your condo corporation’s documents may also set out a minimum permissible rental period. For example, your condo’s documents may prohibit rental or tenancy agreements for a period shorter than six months but may allow rental or tenancy agreements for a longer term.

A condo corporation may have rules about renting that it has not enforced in the past. This does not mean that the rules are not binding. One or more owners may ask at any time that the corporation enforces the rules.

If you are allowed to rent your unit, you must comply with the specific rules outlined in documents related to the operations of your condo.

If you are considering using your condo for short-term rentals, you should first review your condo corporation’s declaration, by-laws, and rules.

You should also review your municipal by-laws, as some municipalities in Ontario may have by-laws prohibiting or placing limits on short-term rentals. Regardless of whether your condominium corporation allows it, you may be prohibited from using your condo as a short-term rental unit.

For example, the City of Toronto recently proposed new rules which would only allow owners or tenants to rent out their primary residence, and only for a period of up to 28 days. This means that a person could not use multiple properties for short-term rentals.  Individuals wishing to rent out their primary residence for short-term rentals would also be required to register with the City, and must include the City-issued registration number in all ads.

For more information on the proposed City of Toronto rules, please visit their website.  

Under section 17 of the Condominium Act, 1998, condominium corporations are required to enforce the provisions of the Act, the declaration and the by-laws and rules of the condo. If an owner does not comply with the Act, declaration, or the by-laws or rules, legal action may be taken against them.

We recommend that you attempt all the steps below in sequence (where appropriate) until your issue is resolved.

1. Understand how short-term rentals are addressed in your condominium corporation

While the Condominium Act, 1998 does not specifically address the issue of short-term rentals, your condo corporation can restrict or even prohibit them through your condo corporation’s declaration and rules.

Refer to the Legislation, By-laws and Rules page to learn more.

If you have already read this information, proceed to step 2.

2. Send a letter or email about the issue to your condominium corporation

Your next step is to communicate the issue to your condo board or manager. You can use the letter or email template on the Resources page to communicate with your condo manager or board.

Notifying your condo corporation or manager that you have an issue with a short-term rental is an important step. Your condo board or manager should be able to tell you how short-term rentals are handled in your condo corporation and let you know what they plan to do to address your issue.

If short-term rentals are prohibited in your condo corporation and you have an issue with another owner or resident renting out their unit, your board or manager will typically contact that owner or resident and ask them to stop.

If you have contacted your board or manager in writing and the issue persists, you may wish to follow up with them and ask how they are planning to resolve it.

What if the self-help tools don’t resolve my issues?

There are further steps you can take if you’ve tried the steps above and still have an issue. These steps include private mediation, arbitration, and/or other legal actions.

Need more help?

Mediation and arbitration are effective ways to resolve disputes where the parties are unable to reach a resolution themselves. Mediation and arbitration are commonly used to help resolve difficult condo disputes and are sometimes called alternative dispute resolution (ADR).

Under section 132 (4) of the Condominium Act, 1998, all condo corporations in the province are deemed to have a provision in their declaration stating that disputes regarding the declaration, by-laws or rules must be filed for mediation or arbitration. Your condo corporation may also have a by-law establishing the procedure that must be followed in the event of a dispute.

If you have been asked to participate in a mediation or arbitration, you are likely legally required to participate.

If you want to try mediation or arbitration for an unresolved issue, you will need to find a mediator or arbitrator who can assist you. You can search for a mediator or arbitrator online and through organizations that provide ADR services, such as the ADR Institute of Ontario.

Mediation

Mediation is a process where a neutral facilitator tries to bring the parties to a mutually agreeable solution. Mediation is the preferred approach because it’s often less costly and it gives the parties an opportunity to collaborate on finding a solution that everyone is comfortable with.

Arbitration

If mediation fails, binding arbitration is the next step. Arbitration is a process where an arbitrator (or panel of arbitrators) conducts a hearing and makes a ruling on the issues in the dispute. The parties involved in the dispute bring evidence to this hearing and then the arbitrator makes a binding decision. There are some cases where an arbitration decision can successfully be appealed to court.

Further legal action

If you are considering legal action against a neighbour or your condo corporation, you may wish to talk to a lawyer or paralegal. It is recommended that you try mediation and/or arbitration before taking a dispute to court.