Airbn-be gone! Dealing with short term accommodations in residential tenancies

How do I get rid of my tenant's Airbnb business?

Airbn-be gone! Dealing with short-term accommodations for landlords
How do I get rid of my tenant's Airbnb business?

So, you’ve just received a letter from your strata corporation informing you that your tenant has been fined for violating the strata’s short-term accommodation bylaw. Before receiving this letter, you had no idea that your tenant was using Airbnb.ca to list your condo for short term occupancy while he was out of town on business trips. Worst of all, your strata corporation is now seeking to collect those fines directly from you instead of pursuing your tenant.

Whether you own a single strata unit or an entire rental building, there are legitimate reasons why you should be concerned about your tenant’s use of short-term accommodation websites such as Airbnb.ca. You may have spent a great deal of time and effort in screening and choosing your tenant only to have different unknown occupants staying at your rental unit every other week. Not to mention, you may have already heard horror stories of extensive property damage caused by Airbnb-stays gone horribly wrong.

As with most technology-driven services in the new “sharing economy”, short-term accommodations can be an excellent source of income if they are regulated, well-managed and not in violation of any city or strata bylaws. However, if you’ve already made a choice to offer only traditional rentals or if your strata corporation has already made the choice for you by passing bylaws which prohibit short-term accommodations, you should take steps to ensure that your tenant is informed and does not cause any unnecessary headaches for you.

The Residential Tenancy Act (the “Act”) provides that a tenant must, at all times, obtain the written consent of the landlord prior to subletting or assigning a lease. If a tenant fails to do so, the landlord may evict the tenant on these grounds. Where a tenant has sought the consent of the landlord to sublease through Airbnb.ca or other similar websites, the landlord may reasonably refuse to grant consent, among other acceptable reasons, if the strata corporation’s bylaws prohibit short-term accommodations.

Such provision may offer a certain level of protection to landlords if short-term accommodations are deemed to be rentals. However, it is still up for debate whether Airbnb-stays are actually rentals from a legal perspective. At least one previous court decision suggests that, in the strata context, they are not rentals but rather licenses to occupy. It is also worth noting that the Act does not apply to living accommodations occupied for the purposes of vacation or travel.

The best practice is to ensure that your tenancy agreement contains a use-of-property clause that prohibits the use of the rental unit by your tenant for purposes that include short-term accommodations. By defining the permitted use of the rental unit, you may avoid getting caught up in the debate about the legal characterization of such accommodations.

If your tenant has already been fined for breaching the strata corporation’s bylaws by using your rental unit to host short-term paying guests, the Strata Property Act allows you to collect from your tenant the fines that the strata corporation seeks to collect from you. If your tenant is willing to mutually terminate the tenancy, you may attempt to negotiate a waiver of outstanding fines by the strata council in exchange for a termination of the tenancy agreement. Your strata may have the incentive to agree to such an arrangement if it believes that this would be the easiest way to prevent ongoing problems.

On the other hand, if your tenant refuses to take any remedial actions, the only solution may be to serve your tenant with a Notice to End Tenancy for cause. In this case, you should seek legal counsel in order to determine the most suitable grounds upon which to terminate the tenancy.

Read Part 2 of this series: “Dealing with short-term accommodations in strata buildings” 

SUGGESTED TENANCY AGREEMENT CLAUSE

USE OF THE RENTAL UNIT:

“The tenant must not use or allow the rental unit to be used for paid short-term accommodation purposes, such as a bed-and-breakfast, lodging house, hotel, motel, inn, hostel, time share or vacation rental. The tenant must not enter into a license for the use of all or part of the rental unit and must not advertise the rental unit for short term accommodation purposes on any websites including but not limited to www.airbnb.com, www.vrbo.com and other similar websites.

The tenant understands that this provision does not affect or alter the tenant’s right to sublet the rental unit or assign the tenancy agreement if consent is provided by the landlord in accordance with section 34 of the Residential Tenancy Act.”

Originally published in LandlordBC‘s Spring 2016 Newsletter.