Blog by Andrew Peck

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When renting your spare room = trouble

When renting your spare room = trouble

Across Canada, many homeowners use websites such as Airbnb and Vacation Rentals By Owner to rent homes, apartments, and spare rooms.

Property owners and tenants give strangers keys, front door codes, and gate openers.

This can bring parking problems, noise, and crime into previously quiet residential communities.

If neighbours complain or police are called, strata councils and municipalities can take action.

Who has authority over short-term rentals?

Strata corporations and the local municipality both have authority.

  1. In British Columbia, under the Strata Property Act, Part 8 – Rentals, a strata corporation has the power to establish and enforce rental bylaws, which may include forbidding rentals or limiting the number of rentals. This is because property owners don't want to share their pool, exercise equipment, gardens, and visitor parking with short-term renters.
  2. Municipalities. In BC, short-term rentals are under municipal jurisdiction. Rental periods of less than 30 consecutive days are typically considered tourist accommodation.

Depending on the municipality, short-term rentals may be:

  • allowed under a specific bylaw (for example, Whistler through its Zoning and Parking Bylaw;
  • allowed under a residential zoning bylaw, for example, Vancouver if the property owner is on site and runs a legal bed and breakfast (B&B);
  • not allowed; or
  • not dealt with. 

Property owners must comply with bylaws

If a municipality permits short-term rentals, property owners have to comply with local zoning and business licensing requirements, strata bylaws, and insurance requirements. 

Property owners must understand:

  • the tax implications set out by Canada Revenue Agency and the BC government;
  • the financial risks and liability involved in renting a home or room(s); and
  • the insurance coverage required.

Insurance

If property owners are renting their apartment, a room, or their entire home, they must notify their insurance company.

Short-term rentals may affect coverage. 

Penalties

A strata council can fine the strata owner as long as the maximum amount of the fine ($500) is set out in the strata’s bylaws.

The municipality may also issue fines or prosecute for municipal bylaw violations. 

Legislation and regulations affecting short-term rentals

In BC, property owners renting short-term must also comply with the following:

  • Hotel Keepers Act and Hotel Guest Registration Act. Oversees short-term rentals to overnight guests, including Airbnbs, B&Bs, boarding houses, homes, privately owned vacation homes, motels, hotels, and resorts of four or more units.
  • Income Tax Act. Applies to property owners receiving rental income from the rental of a property. If owners provide services, such as cleaning and meals, they may be considered to be carrying on a business and different rules apply. Non-residents earning rental income from property in Canada must pay a 25 per cent withholding tax.
  • Provincial Sales Tax Act - Accommodation. Sections 122-125 of the Act regulate the charging of PST on short-term/overnight accommodation including Airbnbs, B&Bs, boarding houses, cabins, hotels, and motels of 4+ units. This function used to be included in the Hotel Room Tax Act, which has been repealed. Information on the collection of the accommodation PST and the municipal and regional district tax (MRDT) is found in this recently updated government bulletin
  • Residential Tenancy Act. Covers rentals of 28+ days. Landlords cannot evict tenants to rent suites on a short-term basis. Tenants cannot rent suites without the landlord’s permission.
Strata Property Act. Covers strata property in BC, including bylaws and rules, and rentals.

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