Ottawa Mulls Ban on Short-Term Rentals

by | Nov 11, 2019 | Rental Property Management Tips

Investors in Ottawa are angry over a proposal that would limit their ability to rent income properties on platforms like Airbnb.

A group calling itself Short and Suite is collecting signatures for a petition it plans to present to city lawmakers demanding that owners of secondary properties be allowed to continue the practice of short-term rentals. Many purchased properties specifically for that reason and have come to depend on the income. They say the city is blind to the needs of these small businesses.

Lawmakers so far have shown little sympathy toward those property owners and argue that the need to protect long-term rental housing inventory is paramount to profits.

All this is happening against a backdrop of violence that has occurred at Airbnb “party house” rentals, the most recent a shooting in California that left five people dead.

In response, Airbnb announced a crackdown on party house rentals, which may include manually culling problem listings. That could be a daunting task given the estimated seven million listings worldwide. Airbnb also will establish a call-in hotline for neighbours to lodge complaints against Airbnb hosts.

What began as a bed and breakfast arrangement — renting out a room while the owner was home to supervise —  has morphed into “ghost hotels” because more guests prefer to have the entire place to themselves. Tenants seized the opportunity to gain income by subletting out the property for the night or weekend while the tenant stayed somewhere else. That left guests to do whatever they wanted and other residents to deal with rowdy parties and strangers in the hallways.

New York was one of the first cities to ban the practice, requiring hosts to be present, and levying fines against landlords when tenants broke the law.

With the expanding popularity of these sublets, landlords still are saddled with the problem of policing short-term rentals — and trying to avoid losing money from property damage, fines, and lower tenant retention. To date, Airbnb has done little to assist.

Because property addresses are hidden on Airbnb, landlords cannot easily determine if their properties are listed by tenants. The tenancy agreement may specifically prohibit the practice, but Airbnb fought — and won — a lawsuit in the U.S. over its refusal to pull listings after a large property manager notified Airbnb that those listings violated the tenants’ lease agreements.

The Ottawa proposal does address this issue for landlords by providing that any tenant seeking to register a short-term rental must have the landlord’s permission.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

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Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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