In Ontario, renting out your entire apartment on Airbnb without your landlord’s explicit written permission is an unauthorized sublet. This is a severe breach of the Residential Tenancies Act and can lead to an immediate N5 eviction notice and termination of your tenancy.
Taking a month-long vacation to Europe or heading home for the summer is exciting, and the idea of covering your rent by listing your empty apartment on Airbnb is incredibly tempting. With nightly rates in cities like Toronto, Ottawa, and London skyrocketing, many tenants see short-term rentals as an easy side hustle. However, from a legal perspective, operating an Airbnb out of an apartment you do not own is fraught with massive risks.
The Ontario Residential Tenancies Act (RTA) strictly governs who is allowed to live in a rental unit. When you hand your keys over to a paying tourist for the weekend, you are technically engaging in a legal sublet. Doing this without your landlord’s blessing-or charging the tourists more than your actual daily rent-violates provincial law. Furthermore, almost every major municipality in Ontario has introduced aggressive bylaws regulating short-term rentals. If you are caught breaking these rules, you risk severe municipal fines and a rapid eviction through the Landlord and Tenant Board (LTB). 💼
Step-by-Step Process: Navigating the Legality of Airbnb for Tenants
Before you even think about creating an online listing, you must ensure you are compliant with both provincial tenancy laws and local city bylaws. Here is how you evaluate the legal landscape.
Step 1: Understanding the Legal Definition of a Sublet
Under the RTA, if you vacate your rental unit and allow someone else to live there and pay you money, you have sublet the apartment. The law states clearly that a tenant cannot sublet their unit without the consent of the landlord.
If you put your entire apartment on Airbnb while you are travelling, you are acting as an unauthorized sublandlord. Your landlord has every right to refuse permission for short-term commercial use, as it heavily impacts their insurance and increases wear and tear on the building. 📝
Step 2: Securing Explicit Landlord Consent
If you want to do this legally, you must ask your landlord for written permission. You should send an email explaining exactly what dates you will be away and that you intend to host guests via a short-term rental platform.
Be prepared for a “no.” Most corporate landlords and condominium boards strictly prohibit short-term rentals in their standard lease agreements or condo declarations. If you do it secretly and the concierge or neighbours complain about strangers with luggage, you will be caught immediately. 🚨
Step 3: Calculating the Maximum Lawful Charge
Here is the rule that destroys most tenants’ Airbnb dreams: under Section 134 of the RTA, it is strictly illegal for a tenant to charge a subtenant more rent than the tenant themselves pays to the landlord.
If your rent is $2,100 CAD a month (exactly $70 a day), you cannot legally charge an Airbnb guest $150 a night. If you generate a profit from your rental unit, it is an illegal charge. The landlord can report you, and the LTB can order you to forfeit all your profits and terminate your lease. 💰
Step 4: Complying with Municipal Bylaws
Even if your landlord agrees and you do not charge a profit, you still face the city. Major cities like Toronto, Mississauga, and Ottawa require all short-term rental operators to register with the municipality and display a license number on their listing.
In Toronto, for example, you can only Airbnb your “principal residence.” You must pay a registration fee, collect the Municipal Accommodation Tax (MAT), and adhere to maximum night limits. Bypassing these bylaws can result in staggering fines from city by-law officers. ⚖️
Step 5: Facing an N5 or N6 Eviction Notice
If you are caught running an unauthorized Airbnb, your landlord will likely serve you an N5 Notice (Interfering with others, Damage, or Overcrowding) or an N6 Notice (Committing an Illegal Act).
An N5 notice gives you 7 days to “void” the eviction by immediately taking down the Airbnb listing and cancelling all future reservations. If you ignore the warning and keep hosting, the landlord will file an L2 application with the LTB to forcefully evict you and sue you for the costs. ⏱️
How Much Can an Unauthorized Airbnb Cost You?
Trying to make a quick $500 on the weekend can quickly spiral into thousands of dollars in legal penalties and eviction costs.
- Municipal Fines: Cities like Toronto can fine unregistered short-term rental operators up to $100,000 CAD, though typical initial tickets range from $1,000 to $5,000 CAD.
- LTB Eviction Costs: If your landlord takes you to the Landlord and Tenant Board, you may be ordered to pay their $186 CAD filing fee and potentially their legal costs.
- Forfeiture of Profit: The LTB can order you to surrender 100% of the illegal profit you made by overcharging tourists directly to the landlord.
- Condo Fines: If the building is a condominium, the condo corporation can charge the unit owner for security dispatches, and the landlord will legally pass those massive chargebacks onto you.
| Airbnb Scenario | RTA Violation? | Risk of Eviction? |
|---|---|---|
| Whole unit while on vacation (No Consent) | Yes (Unauthorized Sublet) | Very High |
| Charging tourists more than your daily rent | Yes (Illegal Charge) | High |
| Renting a spare bedroom while you are home | No (Guest/Occupant rules apply) | Moderate (Depends on condo rules/nuisance) |
Keep in mind that standard tenant insurance completely voids any coverage if damage or a fire is caused by an unauthorized commercial short-term rental guest.
How Long Does the Process Take?
If a landlord discovers an illegal Airbnb, they will act fast. Serving an N5 notice provides the tenant a strict 7-day window to correct the behaviour by cancelling all bookings. If the tenant fails to comply, the landlord will immediately file for an eviction hearing. Getting an LTB hearing date currently takes between 4 to 8 months in Ontario. However, municipal by-law officers can issue massive financial fines within a few weeks of receiving a complaint from a disgruntled neighbour.
Frequently Asked Questions (FAQ)
What if I just rent out my spare bedroom while I am still living there?
If you remain in the unit and only rent a spare bedroom, it is generally not considered a sublet under the RTA; the guest is merely an “occupant.” However, you must still comply with municipal short-term rental registration bylaws, and condo rules may still prohibit it entirely.
Can the landlord evict me immediately without warning?
No. A landlord cannot simply change your locks. They must serve you a formal notice (like an N5) and give you the statutory 7 days to correct the behaviour. If you refuse, they must wait for an official order from an LTB adjudicator.
Does my tenant insurance cover Airbnb guests?
Almost never. Standard renter’s insurance policies have strict exclusions for commercial activities. If your Airbnb guest leaves the stove on and burns down the kitchen, you will be personally sued for hundreds of thousands of dollars in damages.
Why is it illegal to make a profit on my apartment?
The Residential Tenancies Act is designed to protect affordable housing, not to allow tenants to run unregulated hotel businesses. Section 134 specifically prohibits tenants from collecting a fee, premium, or higher rent than they actually pay for the unit.
Can the condo board deactivate my key fobs?
Yes. If the condominium has a strict declaration against short-term rentals (which most in Toronto do), building management can swiftly deactivate your key fobs to prevent tourists from accessing the elevators and amenities, rendering your Airbnb completely inoperable.
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