Airbnb renting fraught with legal risks for hosts

Anti-Airbnb demonstrators rally in New York City in January 2015. REUTERS/Shannon Stapleton

Airbnb has quickly become a money-saving boon for travellers, but it’s a risky proposition for hosts.

And that’s not just because you’re letting total strangers into your home.

Sure, that carries plenty of risks in itself, as one Calgary couple recently learned when their renters’ suspected “drug-induced orgy” trashed the home to the tune of $75,000 in damages.

Even if your renters are responsible people, Airbnb-style renting can invite plenty of legal and insurance problems.

At best, it’s a quasi-legal industry and some jurisdictions are cracking down. Quebec is considering levying taxes and regulations in line with the hotel industry and British Columbia may follow suit.

While Airbnb may be technically legal in your area, you may still be putting yourself in peril. For starters, there’s a good chance such renting violates your own lease or your provincial Residential Tenancies Act in multiple ways.

Each province has different laws governing leases and rental properties, and the Airbnb model contravenes many of those.

How?

Subletting: Short-term rentals aren’t necessarily against the law in your province, but many condos and leases forbid them. Also, many provinces require a tenant to get their landlord’s permission to sublet. Failing to do so can result in eviction.

Also, the original tenant remains liable to the landlord even if they’ve sublet it to another person. So if you rent your place to a traveler and they damage it, the landlord could still charge you for damage, or deduct the repair cost from your security deposit.

Similarly, you may not be allowed to sublet a mortgaged property. It’s not illegal, but it would depend on your own mortgage agreement and violating that convenant could be mortgage fraud. That could also get you evicted or allow your lender to call in the mortgage, meaning you’ve got to pay it all off right away.

Rate: Also, it may be illegal to sublet a place for more than your landlord is charging you. If your rent is $1,000 a month, you’re paying about $33 per day. Therefore, you can’t charge any more than that to an Airbnb traveler. Subletting for profit is still legal in B.C., but many other jurisdictions forbid it.

Insurance: Insurance companies probably won’t like that you’re letting strangers live in your place, but you’d better be honest about it. It may lead the company to raise your premium, but if some disaster occurs while you have travelers staying there, it could lead an insurer to deny you coverage.

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