The Airbnb Effect

February 2018

More than 6,000 condo and apartment suites in the GTA are rented out by the night under the radar of condo corporations, insurance companies, municipal officials and tax collectors according to the Greater Toronto Hotel Association (GTHA).

These are properties that are not allowed to rent for periods of less than 30 days because they are not hotels.  This practice has reached a point where individuals or businesses purchase multiple properties for the sole intention of short-term rentals.  They utilize Internet sites such as Airbnb, and to advertise them.

These properties avoid the regulatory and safety requirements of hotels and may fail to pay taxes on income.  They also fail to pay commercial or hotel property taxes.  Failure to maintain proper insurance is of particular concern to condo owners.  Homeowners insurance does not protect against loss or damage when a property is used as a hotel.  It does not protect neighbours from damage or abuse of common areas resulting from use of a home as a hotel.