This notice to inform and clarify the Government of Ontario’s requirement that short-term accommodation rentals can only be provided to individuals who are in need of housing during the emergency period.
In its communications regarding the list of essential workplaces, the Government of Ontario included the following:
Short term rentals during the emergency period
(1) Every person who provides short term rentals in rental accommodations shall ensure that any rentals booked after April 4, 2020 are only provided to individuals who are in need of housing during the emergency period.
(2) Subsection (1) does not apply in respect of hotels, motels and student residences.
When facilitating short-term accommodation rentals, brokers and salespeople should use their best judgment to determine whether the individual is in need of housing during the emergency, or whether they are seeking accommodation for other purposes.
The obligations for registrants who facilitate short-term accommodation rentals continue to apply and are listed below…
Registrants short-term accommodation rental services
As the business of a real estate brokerage evolves in an ever-changing marketplace, some registrants are looking to provide value-added services such as short-term accommodation rentals. This bulletin explains registrant rights and obligations when facilitating these transactions.
Brokers and salespeople are expected to act professionally and comply with the law at all times. Compliance and professionalism reinforce consumer protection and maintain the integrity of the real estate marketplace.
To facilitate short-term accommodation rentals in Ontario, a business must be registered with either the Real Estate Council of Ontario (RECO) or the Travel Industry Council of Ontario (TICO), and possibly both if the business trades in real estate and provides other travel services.
By virtue of being registered to trade in real estate, registrants are permitted to trade in limited types of short-term accommodation rentals on behalf of consumers, with cottages, condo apartments, homes, cabin establishments, chalets and vacation homes being among the common examples.
For a real estate registrant to remain compliant with the Real Estate and Business Brokers Act, 2002 (REBBA), when facilitating short-term accommodation rentals, the transaction must be conducted through a registered real estate brokerage. Providing any travel services beyond short-term accommodation rentals, however, requires registration with TICO.
Registrants who fail to comply with these requirements could face prosecution by RECO or TICO.
Obligations for brokerages facilitating short-term accommodation rentals
Real estate brokerages trading in short-term accommodation rentals must comply with REBBA, including all prescribed record-keeping and accounting requirements.
Alternatively, they may establish and register a separate travel agency with TICO.
Brokers and salespeople facilitating short-term accommodation rentals
There are two ways that brokers and salespeople may legally trade in short-term accommodation rentals.
Option 1 – Real Estate Brokerage
Conduct the short-term accommodation rentals through their employing brokerage.
Option 2 – Travel Agency
Register their business (e.g. Corporation) as a travel agent or conduct the short-term accommodation rentals through a TICO-registered travel agent, as an employee or contractor of the travel agent.
Note: Registrants must inform RECO in writing within five days of starting to work for another business. This can be done by emailing email@example.com.
Additional travel services
Providing any travel services beyond short-term accommodation rentals requires registration with TICO. Any time that a business acts as an agent for an end supplier of travel services, the activity falls under the Travel Industry Act, 2002 (TIA), and therefore must be performed by a registered travel agent. This could include, but is not limited to:
- Booking river/lake tours
- Facilitating the rental of water sport equipment with a third-party vendor
TIA also applies when providing travel services combined with other services. For example, arranging dinner theatre tickets alone would not fall under TIA. But arranging dinner theatre tickets along with accommodations or transportation would fall under TIA, by virtue of including a travel service.
Registrants must always clarify their role in any transaction and identify which registered real estate brokerage or travel agent is involved.
Complying with REBBA when facilitating short-term rentals through a real estate brokerage
CLARITY IN ADVERTISING
Advertising of short-term accommodation rentals must comply with the advertising requirements under REBBA. In particular, all advertising must be under the brokerage’s registered name, which must be prominently displayed.
DISCLOSURE OF REFERRAL FEES
If you are receiving a fee or other type of compensation for referring a consumer to a third-party for a short-term accommodation rental, this must be disclosed in writing to the consumer. For more information, see the Registrar’s Bulletin on referral fees.
Who is TICO?
TICO regulates Ontario’s travel industry by enforcing the Travel Industry Act, 2002 (TIA) and Ontario Regulation 26/05.
For information about obligations for travel agents under TIA see TICO’s Advisory on Short-term Accommodation Rentals. To find out how to register as a travel agent, visit TICO’s website.
O. Reg. 580/05 (Code of Ethics): Section 36
O. Reg. 567/05 (General): Section 34
Residential Tenancies Act: Section 5(a)
Short-term accommodation rentals (PDF version)
This bulletin has been developed to assist registrant compliance with requirements under in the Real Estate and Business Brokers Act, 2002 (REBBA), the Code of Ethics (O. Reg. 580/05), and other associated regulations, and to highlight some leading practices. It may not address other federal, provincial, or municipal laws to which registrants may also be subject. If you have any questions regarding the information contained in this document, you may contact RECO.
The information provided is for general information and educational purposes only and is not intended to provide legal advice or opinions of any kind. The content of the bulletin is only to be used as a guide. It is neither exhaustive nor intended to address the complexities presented by all real estate transactions. Registrants should not rely on the content of this bulletin as an alternative to legal advice.
The content in this bulletin is current as of the date of publication. While RECO strives to maintain the currency of the information, it makes no claims, promises or guarantees about the accuracy, completeness or adequacy of the content. In the event of a conflict, legislative requirements prevail.