Buying a Toronto condo can be a terrific investment for anybody looking to start investing in the rental market – they’re usually situated in the most highly sought after parts of the city, feature many of the desired amenities, and generally require less maintenance than other properties do. Unfortunately, some Toronto condo owners have found out the hard way that not all tenants are created equally, with some opportunists looking to make a quick buck by illegally listing their property through Airbnb and other home-sharing apps.
Tenants illegally renting out condos on Airbnb
A recent CBC investigation into condos being rented out by tenants using Airbnb discovered that in one case, a condo rented out by Toronto property owner Sanda Jovasevic saw at least 70 Airbnb guests had passed through their property over a period of two years without the owner even knowing it. Evidence of these guests can be found in the more than 70 Airbnb reviews left for the property, which naturally shocked Jovasevic as she had been receiving regular payments from her “tenant” and had initially believed them to be an ideal tenant. Jovasevic never actually met her “tenant”, instead allowing the deal to be brokered through a real estate agent and the tenant in question.
After a number of months, the property owner was made aware of a number of incidents that had taken place in her condo. The many guests staying in her property caused damage to the property, created loud noises which disturbed neighbours, and on some occasions even left the front door wide open after leaving the property. Not only did the tenant exploit the situation by renting out the property without consent or approval, but the property owner in question isn’t even sure whether the “tenant” ever lived or moved into the property at all. Jovasevic brought the case to the Landlord and Tenant Board, and eventually received just $4,400 as compensation for the damages to the property.
Anti-Airbnb clauses in some Toronto condos
Situations like the one described above can cost a property owner time and money in repairing damages made to the property and fighting the case with the Landlord and Tenant Board, but are further complicated by the fact that a number of Toronto condos feature anti-Airbnb and other home sharing service clauses in their contracts. Breaking the terms of a condominium unit contract can result in evictions and a loss of property, fines, or legal repercussions.
The city of Toronto is also looking to pass a rule that would restrict the listing of properties on Airbnb and similar sharing services to principal residences only, with a hearing on the matter scheduled at the end of summer 2018. These rules have been proposed due to the potential dangers that stem from a unit being rented out by somebody who isn’t the owner or property manager, as there is a lack of transparency and accountability in the matter. If you do want to purchase a condo with the express purpose of renting it out on Airbnb, look for condos that allow this activity.
The importance of a respectful and professional property manager
Situations like the one uncovered by the CBC and countless others further reinforces the importance of seeking out a respectful property manager who will ensure that these things don’t happen by thoroughly screening tenants and by recognizing suspicious activities like these. Having a tenant or property manager who illegally rents out your condo unit on home sharing services like Airbnb can violate the terms of your condominium’s contract, putting you in a precarious legal situation that could see you lose the property or be levied a hefty fine. Having a property rented behind your back like this could also land you in hot water should something go wrong with the renter in question, being held accountable for something that could have been so easily avoided.
Hiring a property management firm like Highgate Properties gives you immediate access to a team of Toronto real estate professionals who will always look out for your best interests. We do this by effectively screening all tenants who apply to live in your unit, by recognizing red flags and suspicious behaviour that might indicate a unit is being rented out illegally, and by responding to maintenance problems and other emergencies at all hours. If you do want to purchase a rental property for the sole purpose of renting it out on Airbnb, we’ll help you find one that isn’t constrained by condo rules, and facilitate your rentals professionally so that you’ll always get top marks from your guests. We will also screen tenants and ensure that your property is being used for the purposes it is being rented for. Hiring a Toronto property manager like Highgate who respects the rules and regulations of your condominium will give you complete peace of mind, and free you up to take care of the more important things in your life.
For more information about the property management and realty services offered by the experienced team at Highgate Properties, contact us today.