Your Tenant Put the Unit on Airbnb Without Asking: What an Ontario Landlord Can Actually Do

There are two separate remedies, and they run at the same time — one goes after the occupancy, one goes after the money. Each has a deadline that can quietly close the door.

I am Arthur Zhao, a Broker with AZ Real Estate Partners, and over 12 years I have represented landlords in 160-plus tenancies. This is one of the questions that comes up more every year: a landlord discovers, usually by accident, that the unit they rent out at market rent is quietly live on Airbnb — and the tenant is pocketing the difference.

Here is the part most people get wrong. They treat it as one problem with one answer. It is actually two separate problems, each with its own rulebook and, more importantly, its own clock. One is about the occupancy — who is allowed to be in the unit, and how you end the tenancy. The other is about the money — what the tenant collected, and why the law treats it as an illegal charge. Below I walk through both, and the one date that quietly decides how much leverage you actually have.

First, get the label right — Airbnb guests usually are not “subtenants”

Before anything else, name it correctly, because the label decides which rules apply.

A lawful sublet under s.97 of the Residential Tenancies Act needs your consent, and the sub-rent cannot exceed the rent you lawfully charge; the original tenant also stays on the hook for the tenancy. Short-stay Airbnb bookings are not that. Overnight guests are generally not “subtenants” — nobody took over the tenancy, they just paid to stay. In practice that means the situation falls under s.100 unauthorized occupancy, not subletting.

Why this matters: it puts you on the s.100 track, and it means the tenant cannot wave it away as “I was just subletting, which is my right.” It was never authorized in the first place.

Two remedies, running in parallel

Track 1: the 60-day clock is the whole game

Under s.100(1), where a tenant transfers occupancy to someone other than by an authorized assignment (s.95) or an authorized sublet (s.97), you may apply to the Board for an order terminating the tenancy and evicting both the tenant and the person the unit was handed to. You can also apply, under s.100(3), for an order that the unauthorized occupant pay compensation for their use and occupation.

Then comes the trap. Under s.100(2), that application must be made no later than 60 days after you discover the unauthorized occupancy. The clock runs from discovery, not from when the Airbnb activity started. Discover it, feel understandably angry, spend a few weeks deciding what to do — and this route can close on you.

There is also a quieter option. Under s.104, instead of evicting, you may negotiate a new tenancy agreement directly with the person occupying the unit (s.104(2) deals with an overholding subtenant where the tenant has abandoned the unit). That is a business decision, not just a legal one — sometimes keeping a paying occupant is better than an empty unit and a hearing.

Track 2: the money the tenant made is treated as an illegal charge

This is the part landlords underestimate. Under s.134(3), no tenant — and no one acting for the tenant — may, directly or indirectly:

• (a) sublet for a rent greater than the rent you lawfully charge for the unit;
• (b) collect any fee, premium, commission, bonus, penalty, key deposit or like amount for subletting, for surrendering occupancy, or for otherwise parting with possession;
• (c) require consideration for goods or services as a condition of the subletting, assignment or surrender, beyond the rent lawfully payable.

Pocketing the spread between the Airbnb nightly rate and your rent lands squarely in (a) and (b). And this is not just a private dispute: under s.234(l) it is an offence to charge or collect amounts in contravention of s.134. On conviction, s.238 sets the fine at up to $100,000 for an individual and up to $500,000 for a corporation. Whether a prosecution is actually pursued, and by whom, is a separate question — but the exposure is real, and it is the tenant’s, not yours.

The municipal registration is a red herring — it is not consent

Tenants often point to a City registration as if it settles things. In Toronto, it does not. Per the City of Toronto, short-term rentals are only allowed for your principal residence, and you can only have one principal residence, so a tenant cannot legally run more than one short-term rental.

More to the point for you as the landlord: the City states plainly that it does not require renters to obtain landlord consent to register or operate a short-term rental, does not collect information to verify consent, and does not investigate landlord complaints about a renter operating without consent. The City’s own guidance only advises operators, as a best practice, to make sure their lease allows it or to get written consent.

So frame it precisely: a municipal registration is a separate track. It is not evidence that you consented, and it does not immunize the tenant from s.100 or s.134. The reverse is also true — a listing that is perfectly compliant with City rules can still leave the tenant exposed on both tracks under the Residential Tenancies Act.

What to actually do, in order

Arthur Zhao

Real Estate Broker · FRI · ABR · SRS · PSA · MCNE · E-PRO · CLHMS & GUILD Elite · REAIS

VP & Branch Manager, Bay Street Group Inc.

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