Written by: Anika Helen - Paralegal
Short Term Lease
A short-term lease generally refers to a lease with a duration of less than six months. Often, they are based on a month-to-month rental agreement, which may or may not be renewed at the end of each month. Although monthly agreements are the most common, they may be weekly, or even less than one week in the case of vacation rentals. Short-term leases are more common in areas with high demand and low supply of rental property as landlords can afford to be more particular about who they choose as tenants, and can raise the rent at the end of each short lease period. The Residential Tenancies Act (RTA) still applies if bathroom, laundry and kitchen are not shared.
Short Term Rental
Not covered by the RTA, A short-term rental is all or part of a dwelling unit rented out for less than 28 consecutive days in exchange for payment. This includes bed and breakfasts (B&Bs) but excludes hotels and motels. It also excludes other accommodations where there is no payment.
All short-term rental companies are required to obtain a licence to operate in the City of Toronto. Short-term rental operators are people renting their homes or rooms on a short-term basis, for a period of less than 28 consecutive days. These operators need to register with the City and are required to collect and remit a four per cent (4%) Municipal Accommodation Tax (MAT) on all rentals.
To register a property for short-term rental use, the operator is required to provide some basic information to the City, make a declaration that the rental address is their principal residence, and keep records of all short-term rental activity, which must be provided to the City upon request. The operator must also provide emergency information to all guests, provide contact information of a person available by phone 24 hours a day, and pay an annual registration fee of $50.
Short-term rental companies, such as Airbnb and VRBO, are subject to additional requirements. A short-term rental company must ensure that each of its listings has a valid registration number, develop a procedure to mitigate nuisances, and provide information to the City about short-term rental activity. Short-term rental companies are also required to pay a $5,000 one-time licence application fee and a $1 fee for each night booked.
Long Term Lease
A lease longer than 1 year is a long-term lease. It is covered by the RTA except for the specific situations listed below.
Exemptions from Act:
Section 5 This Act does not apply with respect to,
(a) living accommodation intended to be provided to the travelling or vacationing public or occupied for a seasonal or temporary period in a hotel, motel or motor hotel, resort, lodge, tourist camp, cottage or cabin establishment, inn, campground, trailer park, tourist home, bed and breakfast vacation establishment or vacation home;
(b) living accommodation whose occupancy is conditional upon the occupant continuing to be employed on a farm, whether or not the accommodation is located on that farm;
(c) living accommodation that is a member unit of a non-profit housing co-operative, except for Part V.1, and except for those provisions in other Parts that are needed to give effect to Part V.1;
(d) living accommodation occupied by a person for penal or correctional purposes;
(e) living accommodation that is subject to the Public Hospitals Act, the Private Hospitals Act, the Long-Term Care Homes Act, 2007, the Ministry of Correctional Services Act or the Child, Youth and Family Services Act, 2017;
(f) short-term living accommodation provided as emergency shelter;
(g) living accommodation provided by an educational institution to its students or staff where,
(i) the living accommodation is provided primarily to persons under the age of majority, or all major questions related to the living accommodation are decided after consultation with a council or association representing the residents, and
(ii) the living accommodation does not have its own self-contained bathroom and kitchen facilities or is not intended for year-round occupancy by full-time students or staff and members of their households;
(h) living accommodation located in a building or project used in whole or in part for non-residential purposes if the occupancy of the living accommodation is conditional upon the occupant continuing to be an employee of or perform services related to a business or enterprise carried out in the building or project;
(i) living accommodation whose occupant or occupants are required to share a bathroom or kitchen facility with the owner, the owner’s spouse, child or parent or the spouse’s child or parent, and where the owner, spouse, child or parent lives in the building in which the living accommodation is located;
(j) premises occupied for business or agricultural purposes with living accommodation attached if the occupancy for both purposes is under a single lease and the same person occupies the premises and the living accommodation;
(k) living accommodation occupied by a person for the purpose of receiving rehabilitative or therapeutic services agreed upon by the person and the provider of the living accommodation, where,
(i) the parties have agreed that,
(A) the period of occupancy will be of a specified duration, or
(B) the occupancy will terminate when the objectives of the services have been met or will not be met, and
(ii) the living accommodation is intended to be provided for no more than a one-year period;
(l) living accommodation in a care home occupied by a person for the purpose of receiving short-term respite care;
(m) living accommodation in a residential complex in which the Crown in right of Ontario has an interest if,
(i) the living accommodation or residential complex was forfeited to the Crown in right of Ontario under any Ontario statute or the Criminal Code (Canada),
(ii) possession of the living accommodation or residential complex has been or may be taken in the name of the Crown in right of Ontario under the Escheats Act, 2015, or
(iii) the living accommodation or residential complex is forfeited corporate property to which the Forfeited Corporate Property Act, 2015 applies
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