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The Real World of Short-Term Condo Rentals

The Real World of Short-Term Condo Rentals

A big issue that has been rocking the Toronto condo scene over the last year is short-term rentals, particularly the use of home-sharing sites like Airbnb.

With the news in October that New York City had fought a legal battle with Airbnb to ban short-term rental listings, many Torontonians wondered if such measures would soon come marching north. Currently, short-term rental regulation in Toronto is a murky subject, as the municipal bylaws are in transition.

What's the problem with short-term condo rentals?

In the City of Toronto, short-term rentals are technically designated within the zoning bylaws of hotels, which are businesses subject to taxes and other regulations. Although the City of Toronto amalgamated in 1998, many of the updated city-wide bylaws have yet to be ratified by the Ontario Municipal Board, leaving in place the old bylaws of the former municipalities such as North York, Toronto and East York, Scarborough, and Etobicoke.

The old municipal bylaws lack efficient regulations for short-term home sharing options like Airbnb. Why? Because they didn’t exist 50 years ago!

As such, the City of Toronto deals with short-term rental regulation on a case by case basis, for the time being. The new city-wide bylaws are working to address the obvious changes in the way people live today, ideally to find a useful and efficient way to allow short-term rentals with proper regulation.

However . . .

In March of 2016, Toronto laid its first charge against a short-term rental host in North York, based on an old municipality bylaw that requires short-term rentals to be a minimum of seven days. Basically, the neighbourhood was concerned that the rented property was being used as a ‘party-house’ that caused a lot of noise disruption in the community.

And last week, the Ontario Superior Court ruled that an Ottawa condo corporation has the right to ban short-term rentals, based on the provisions in the condo’s declaration. In this case, one of the unit owners had been renting out their home on sites like Airbnb,, and to guests who sometimes stayed for as little as one night, which violated the “single-family use” provision.

You’ve probably heard similar stories in the media of complaints about the disruption, inconvenience, and damage brought into Toronto condo buildings when short-term rentals are allowed.

And you’ve probably also heard tales about the financially lucrative nature of short-term rentals.

So, it’s a HOT topic among condo owners, right now, especially for investors and first-time buyers who hear stories of rental hosts making thousands of dollars every week and want in on the action.

What's the future for short-term condo rentals?

All in all, it seems unlikely that short-term rentals and home sharing options will be banned in Toronto. The lifestyle is simply too popular among young people. New bylaws might come into place to help regulate the market and address the concern for affordable, long-term rental housing in Toronto, but it will likely involve the requirement that hosts declare rental income for tax purposes or register as a rental business.

That being said, we have found that the majority of condo buildings in Toronto prohibit short-term rentals below a six-month minimum lease. The decision is ultimately up to the condo corporation based on the condo’s declaration.

One of the great things about condo living, however, is that the rules of the condo board can be changed. An amendment to the condo’s declaration requires at least 80% majority vote. It’s difficult, but it is possible. So, if you want to buy a condo and offer short-term rentals, you should look for specific buildings or neighbourhoods where the majority of owners want the same thing. Either the condo will already allow short-term rentals, or you could rally other like-minded owners and make a change.

Top spots in Toronto where we’ve seen short-term rentals include King West , The Core , the St. Lawrence Market area , and The Waterfront . If you’re looking, our Condo Pros can help you navigate these neighbourhoods to find the right buildings.

There are roughly 9,800 active Airbnb rentals in Toronto, of which over 50% are rented for 1-3 month periods. It is happening, and rental hosts are enjoying lucrative revenue. But there are definite considerations to address before you toss your unit into the short-term rental world.

Some things to consider about short-term condo rentals: 

1 - What does your condo’s declaration say about short-term rentals? Is it permitted? Could you be sued? On average, a short-term rental is anything less than six months.

2 - Think about insurance. If you have property insurance, the coverage may not extend to rental coverage on a short-term basis. Damage to walls, floors, appliances, etc. might not be covered, and who’s liable if your guest skips town after a single night?

3 - Do some research into the percentage of owner-occupants. Buildings with majority owner-occupied units tend to be less open to short-term rentals. But buildings with high renter-occupants, such as the condos in CityPlace, might be more welcoming to short-term rental opportunities.

Remember, condos are not hotels. They are versatile homes with conveniences and amenities that make them truly unique properties and smart investments. You can get a lot from a condo, but you want to plan wisely.