The rise of short-term rental platforms like Airbnb has created a complex legal landscape where traditional landlord-tenant law intersects with municipal regulations, business licensing, and the gig economy. At the Landlord and Tenant Board, these cases reveal fascinating questions about when the Residential Tenancies Act applies, what constitutes a "temporary" rental, and how municipal bylaws interact with provincial tenancy law.
This comprehensive analysis of real LTB cases reveals the evolving legal framework governing short-term rentals in Ontario, providing crucial guidance for property owners, tenants, and anyone navigating this rapidly changing area of law.
The Fundamental Question: When Does the RTA Apply?
The Residential Tenancies Act doesn't apply to all rental arrangements. Section 5(a) specifically exempts "living accommodation intended to be provided to the travelling or vacationing public or occupied for a seasonal or temporary period" in various establishments including hotels, motels, resorts, and vacation homes.
This exemption is at the heart of most short-term rental disputes at the LTB.
Case Study: The Airbnb Exemption Success
In rana-v-arad-20250312, a landlord applied for non-payment of rent, but the tenant successfully argued the unit was exempt from the RTA because it was "used as a short-term rental booked through Airbnb."
The Board found that "the pattern of activities surrounding the rental unit, including the inconsistent rent amounts, rental periods, and the requirement to mutually agree to extend the agreement, is akin to a hotel setting and not a traditional tenancy." The key determinations were:
- Residential Tenancies Act does not apply to the rental unit
- Rental unit constituted living accommodation intended for a temporary period, akin to a hotel
- No evidence presented to demonstrate the nature of the tenancy changed at any point
This case demonstrates that genuine short-term rental arrangements can successfully claim RTA exemption.
Case Study: When Airbnb Doesn't Equal Exemption
However, not all Airbnb arrangements escape RTA coverage. In govedaris-v-mcilquham-20231214, despite the unit being "listed on Airbnb for short-term rentals," the Board still found the RTA applied.
The tenant had argued that "the rental unit is exempt from the Act" and relied on "Toronto Municipal Code Chapter 547, Licensing and Registration of Short-term Rentals which defines a short-term rental as less than 28 consecutive days."
But the Board determined that "the Tenant's occupation of the unit was not as a permanent residence or living accommodation" was insufficient to establish exemption. Key factors included:
- Tenant booked and paid for unit through Airbnb platform
- Tenant's stay was extended multiple times with Landlord's consent
- Tenant did not update government ID or documents with rental unit address
- Tenant was searching for permanent full-time residence
This case shows that the platform used (Airbnb) doesn't automatically determine RTA applicability—the substance of the arrangement matters more.
The Business Purpose Test
One of the most significant developments in short-term rental law comes from zeta-psi-elders-association-v-kavanaugh-20210923, where a tenant was using a coach house "for short-term Airbnb rentals, which was his only source of income."
The Board found the tenancy exempt under section 5(j) because "the predominant purpose of the tenancy is for the Tenant to operate a short-term rental business on Airbnb, rather than for residential purposes." Key determinations included:
- Coach house is living accommodation
- Tenant's Airbnb activity is a business purpose
- Predominant purpose of tenancy is business, not residential
- Tenancy is exempt from RTA under s. 5(j)
This case establishes that when short-term rentals become the primary business purpose of a tenancy, the RTA may not apply even to traditional rental units.
Municipal Bylaws and Illegal Activity
Short-term rentals often run afoul of municipal bylaws, creating grounds for eviction under the RTA when it does apply.
Case Study: Toronto's Municipal Code Enforcement
In shum-v-nambakhsh-20220613, a landlord successfully terminated a tenancy where the tenant was operating short-term rentals in violation of Toronto Municipal Code Chapter 547.
The Board found that "the use of the rental unit as a short-term rental is found to be an illegal act contrary to Toronto Municipal Code Chapter 547, and has the potential to affect the character of the residential complex, warranting termination of the tenancy."
The tenant was evicted and ordered to pay compensation, demonstrating that municipal bylaw violations can provide strong grounds for termination when the RTA applies.
Case Study: When Bylaws Don't Support Eviction
However, municipal bylaws don't always support eviction. In lds-v-dr-and-sr-20190206, despite allegations of "short-term rental of the unit on Airbnb," the Board found that "short-term rental activity not found to be illegal under current zoning bylaws."
The landlord's N5 and N6 notices were found invalid, and the application was dismissed. This case highlights the importance of understanding specific municipal regulations before pursuing eviction based on short-term rental activity.
Bad Faith Evictions and Short-Term Rentals
A disturbing trend has emerged where landlords use N12 notices (personal use) to evict tenants, only to convert units to short-term rentals instead.
Case Study: The Airbnb Bait-and-Switch
In swan-v-hedayati-20230908, a landlord served an N12 notice claiming their spouse needed the unit, but "the rental unit was listed on Airbnb for short-term rentals" after the tenant vacated.
The Board found the landlord served the N12 notice in bad faith and awarded the tenant $12,560.30, including:
- $8,508 for increased rent
- $2,999.30 for moving expenses
- $1,000 in general compensation
- $53 for the application fee
Similar patterns appear in h-k-o-v-f-t-20171107 and del-vecchio-v-harihar-20240906, where landlords falsely claimed personal use only to operate short-term rentals instead.
These cases demonstrate that using N12 notices to clear units for Airbnb conversion constitutes bad faith eviction with significant financial consequences.
Unauthorized Occupancy and Subletting Issues
Short-term rentals can also create unauthorized occupancy issues when tenants operate them without landlord consent.
Case Study: The Unauthorized Airbnb Operation
In enterprise-reit-operating-lp-v-hasan-20240815, a tenant was "using the unit for short-term rentals through a company" while claiming the occupants were roommates.
The Board found the tenant had "transferred occupancy to Unauthorized Occupants in a manner not authorized by the Act" and terminated the tenancy. The tenant was ordered to pay $201 for the application fee, and unauthorized occupants were required to pay daily compensation.
This case shows that operating short-term rentals without landlord consent can constitute unauthorized transfer of occupancy, grounds for eviction under the RTA.
Conditional Orders and Compliance
Not all short-term rental violations result in immediate eviction. Boards sometimes issue conditional orders allowing tenancies to continue with restrictions.
Case Study: The Conditional Preservation
In fung-v-lin-20240411, despite finding that the tenant "rented unit for short-term stays at higher rate than lawful rent," the Board granted a conditional order rather than eviction.
The tenant was required to "refrain from short-term renting" and pay the landlord's application fee of $186. If the tenant breached these conditions, the landlord could apply for eviction without further notice.
Similarly, in toronto-community-housing-corporation-v-little-20210811, the Board denied eviction on condition that the tenant "shall not rent out the rental unit on Airbnb or otherwise rent or sublet the unit on a short-term basis."
These cases show that first-time violations may result in conditional orders rather than immediate eviction, particularly where tenants acknowledge wrongdoing and agree to cease the activity.
The Temporary Accommodation Analysis
Courts and tribunals apply a multi-factor test to determine whether accommodation qualifies as "temporary" under section 5(a).
Case Study: The Beach Resort Exemption
In zandona-v-seaforth-20211018, the Board found a rental unit exempt because it was "part of a beach resort and intended for short-term, seasonal rentals to the vacationing public."
Key factors supporting exemption included:
- Rental agreement had a fixed termination date
- Landlord made it clear tenancy could not be extended
- Property was part of a beach resort operation
- Intended for seasonal, short-term use
Case Study: The Failed Temporary Claim
Conversely, in anderson-v-coughlin-20241025, despite the landlord's "intention to provide short-term guest accommodation," the Board found the RTA applied.
The tenant had signed a "Booking Form for a 4-month fixed term," but the Board determined that "the Tenant was not required to share the kitchen and bathroom with the Landlord, so the exemption in s. 5(i) did not apply."
This case demonstrates that landlord intention alone doesn't establish exemption—the actual arrangement and its characteristics matter more.
Commercial vs. Residential Purpose
The distinction between commercial and residential use is crucial in short-term rental cases.
Case Study: The Corporate Arrangement
In kwon-v-mary-am-hospitality-20210514, the Board found no jurisdiction because "the tenancy is commercial in nature and the rental unit is exempt from the Residential Tenancies Act."
The unit was "leased to the corporate Tenant Mary-Am for the purpose of providing short-term furnished accommodations," making it a commercial arrangement rather than residential tenancy.
This case illustrates how corporate short-term rental operations may fall outside RTA jurisdiction entirely.
Practical Implications for Landlords
Due Diligence Requirements
Landlords must understand their local municipal bylaws before pursuing eviction based on short-term rental violations. As lds-v-dr-and-sr-20190206 demonstrates, assumptions about illegality can lead to failed applications and wasted costs.
Lease Provisions
Clear lease provisions prohibiting short-term rentals can provide stronger grounds for eviction. Cases like thadani-v-roozbahani-20210730 show that "Tenant listed unit on Airbnb in violation of lease" can support termination applications.
Bad Faith Risks
Using N12 notices to clear units for Airbnb conversion carries significant financial risks. Awards in bad faith cases can exceed $12,000, as seen in swan-v-hedayati-20230908.
Practical Implications for Tenants
Understanding Exemptions
Tenants in genuine short-term rental arrangements may not have RTA protection. Understanding when exemptions apply is crucial for asserting rights.
Municipal Bylaw Compliance
Operating short-term rentals in violation of municipal bylaws can provide grounds for eviction even under the RTA. Tenants should verify local regulations before engaging in such activities.
Documentation Importance
Cases like govedaris-v-mcilquham-20231214 show that factors like updating government ID and establishing permanent residence can influence RTA applicability.
The Role of Municipal Bylaws
Municipal bylaws play a crucial but limited role in LTB proceedings.
LTB's Limited Authority
As established in smith-v-lehan-20210309, "the LTB does not have authority to bind the municipality or to weigh in on bylaw enforcement." The Board cannot override municipal decisions or grant exemptions from local regulations.
Bylaw Violations as Grounds for Eviction
However, municipal bylaw violations can support eviction applications when they constitute illegal acts under the RTA. The key is proving the specific violation and its impact on the tenancy.
Emerging Trends and Future Considerations
Platform Neutrality
The specific platform used (Airbnb, VRBO, etc.) doesn't determine RTA applicability. Courts focus on the substance of the arrangement rather than the booking method.
Duration Thresholds
While some municipalities define short-term rentals by duration (e.g., less than 28 days), the LTB applies a more holistic analysis considering all circumstances of the arrangement.
Business Purpose Evolution
The zeta-psi-elders-association-v-kavanaugh-20210923 decision suggests that when short-term rentals become the primary business purpose, even traditional rental units may lose RTA protection.
Best Practices for Legal Compliance
For Property Owners
Before Listing:
- Verify municipal licensing requirements
- Check zoning and bylaw compliance
- Review condo corporation rules if applicable
- Understand tax implications
During Operation:
- Maintain proper records
- Comply with safety regulations
- Respect neighbor concerns
- Monitor regulatory changes
For Traditional Landlords
Lease Drafting:
- Include clear short-term rental prohibitions
- Specify consequences for violations
- Address subletting and assignment rules
- Consider insurance implications
Enforcement:
- Document violations thoroughly
- Understand municipal bylaw requirements
- Serve proper notices under the RTA
- Avoid bad faith eviction tactics
For Tenants
Before Engaging in Short-Term Rentals:
- Review lease agreements carefully
- Check municipal licensing requirements
- Understand insurance implications
- Consider neighbor impact
If Facing Eviction:
- Verify specific bylaw violations
- Challenge improper notices
- Document compliance efforts
- Seek legal advice for complex cases
The Intersection of Provincial and Municipal Law
Short-term rental regulation involves multiple levels of government, creating complex compliance requirements.
Provincial Jurisdiction
The RTA governs landlord-tenant relationships but includes specific exemptions for temporary accommodations. The LTB interprets these exemptions based on the substance of arrangements rather than their labels.
Municipal Authority
Municipalities regulate short-term rentals through:
- Zoning bylaws
- Business licensing
- Safety standards
- Noise and nuisance controls
Federal Considerations
Tax obligations under federal law can influence the characterization of arrangements as business or residential.
Looking Forward: Regulatory Evolution
The short-term rental landscape continues evolving as governments adapt to new technologies and business models.
Potential Reforms
Future changes might include:
- Clearer RTA exemption criteria
- Standardized municipal approaches
- Enhanced enforcement mechanisms
- Better integration between levels of government
Industry Adaptation
Property owners and platforms are developing new approaches to compliance, including:
- Professional management services
- Compliance monitoring tools
- Insurance products for short-term rentals
- Industry self-regulation initiatives
Conclusion: Navigating the Complex Landscape
The intersection of short-term rentals and Ontario's rental laws creates a complex legal landscape requiring careful navigation. Key takeaways from LTB cases include:
For RTA Exemptions:
- Genuine temporary accommodations may qualify for exemption
- Business purpose can override residential characterization
- Platform used doesn't determine legal status
- Substance matters more than form
For Municipal Compliance:
- Bylaw violations can support eviction under the RTA
- LTB cannot override municipal authority
- Local regulations vary significantly
- Compliance is property owner's responsibility
For Enforcement:
- Bad faith evictions carry significant penalties
- Conditional orders may preserve tenancies
- Proper notice requirements must be followed
- Documentation is crucial for success
For Future Planning:
- Regulatory landscape continues evolving
- Multiple compliance requirements apply
- Professional advice often necessary
- Industry practices are developing
The cases examined reveal that success in short-term rental disputes depends on understanding the interplay between provincial tenancy law, municipal regulations, and the specific facts of each arrangement. Whether you're a property owner considering short-term rentals, a landlord dealing with unauthorized activity, or a tenant navigating these complex waters, the key is thorough preparation and compliance with all applicable laws.
As this area of law continues to develop, staying informed about regulatory changes and court decisions will be essential for anyone involved in Ontario's evolving rental market. The LTB's approach emphasizes substance over form, requiring careful analysis of each situation's unique circumstances rather than relying on simple categorizations or platform labels.
The future of short-term rentals in Ontario will likely involve continued refinement of these legal principles, better coordination between different levels of government, and evolving industry practices that balance innovation with tenant protection and community interests.
