Mario Toneguzzi

Mario Toneguzzi is a contributing writer for REM. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald, covering sports, crime, politics, health, faith, city and breaking news, and business. He now works on his own as a freelance writer for several national publications and consultant in communications and media relations/training. Mario was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list.

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Richard Kennedy

Richard is a dedicated team member at Hospiria, specializing in providing guests with luxury short-term rental experiences that combine the comforts of home with hotel quality. His focus is on ensuring every detail contributes to a memorable stay.

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Understandably, waterfront property owners whose lands are traversed by a ROW may have concerns over who is allowed to use the ROW and for what purposes.

A recent decision of the Ontario Superior Court of Justice addressed whether the use of a ROW could be restricted to the owners of the non-waterfront cottage and their non-paying guests, in order to prevent the use of the ROW by users of Airbnb and similar high-turnover rental programs: Fisher v. Saade, 2021 ONSC 1241 (CanLII).

The applicants were the owners of a waterfront property on the Bay of Quinte. The respondent owned the non-waterfront property and had a registered ROW over the applicants’ land to access a swimming beach. There were no restrictions that addressed what would happen if the owner’s tenants used the ROW or that otherwise limited use of the ROW to the owner and his friends or family.

The parties agreed that the ROW was for pedestrian access only but they disputed whether the respondent’s right to use of the ROW included paying guests, tenants or other invitees. There was no issue with any bylaw or municipal restrictions in renting the property. Rather, the applicants’ driving concern was what they viewed as the “commercialization” of the ROW, which flowed from the high-traffic activity associated with Airbnb rentals. Simply put, they could not agree on who could access the lake using the ROW.

In deciding the matter, the court was guided by prior cases that focused on the specific words creating (or granting) the ROW and the historical circumstances of the use of the subject lands at the time of the grant. These cases are: Fallowfield v. Bourgault, 2003 CanLII 4266 (ON CA); Golisky v. Romanuik, 1951 CanLII 337 (ON CA), [1951] 2 D.L.R. 475; and Bell v. Marsh, 1951 CanLII 338 (ON CA), [1951] 3 D.L.R. 486.

The court found that there was no lack of clarity in the language granting the ROW and that its purpose was clearly to provide access to the water for the owner of the respondent’s property. The historical use of the ROW over the applicants’ property never had any sort of limitation and in fact, at various points in the past, there were clear references to use of the ROW by tradespeople and guests.

The court concluded that the reference to the “owner’s use” of the ROW could not be interpreted as only the owner and only their non-paying guests or invitees. Further, ownership of a cottage property generally includes the right to rent it out to paying guests. Many cottage owners finance payment of their annual property taxes and maintenance costs through such rental income. The applicants rented out their own cottage property at times. Renters of the respondent’s cottage may understandably wish to use the ROW.

The court reasoned that this use of the ROW should not have been a surprise to the applicants, and that it was unreasonable for them to demand that the ROW be restricted to the respondent and his non-paying guests and family members. Had this type of severe restriction been intended then it should have been clearly worded when the ROW was registered on title.

As a result, the court dismissed the applicants’ request to limit the use of the ROW to the respondent’s non-paying friends and family.

At the same time, however, the respondent was found by the court to have unreasonably expanded the use of the ROW beyond its intended purpose of access to the water. Apparently, the respondents’ Airbnb guests had complained that there was nowhere to sit and enjoy the beach area. As a result, the respondent had installed a ramp and dock on the applicants’ property along with furniture and a surveillance camera. The applicants sought an order requiring the respondent to move these obstructions.

A ROW may include “ancillary rights” that are reasonably necessary for the use and enjoyment of the ROW as intended. Such ancillary rights must be reasonably necessary for the use and enjoyment of the ROW. One example cited by the court involved the case of an ROW to water for the purpose of accessing an island, which resulted in the ancillary right to build a dock: Mackenzie v. Matthews, 1999 CanLII 19931 (ON CA).

This ancillary right was necessary so that the users of the ROW could dock their boat to access the island. However, ancillary rights cannot be unreasonably expanded beyond the intended purposes of the ROW.

In the case at hand, there was no convincing evidence that the ramp and dock built by the respondent were reasonably necessary to access the water and swimming area. In that regard, the complaint of the Airbnb guests as to the lack of a lounging area was telling. The respondent could not in fact provide a waterfront piece of property for either tenants or his own enjoyment for the simple reason he did not actually own any waterfront property. In the court’s words, the ROW is “a path to and from the water. That is the extent of it.”

The court stated that the respondent had an obligation to ensure that any guests understand that the sole purpose of the ROW was to access the water. The dock and ramp were an improper extension and use of the ROW. Cameras that focused primarily on a neighbouring property without consent are an invasion of privacy. Placement of furniture on the applicants’ land or damage to their things was not part of the right to access the water. The court made orders requiring the removal of the offending structures by the respondent and prohibiting trespassing on the applicant’s property outside of the ROW.

The case demonstrates the tensions that may arise between adjacent property owners when one has access to the water across the other’s land. A ROW is a valuable right and cannot be unreasonably limited by the waterfront property owner in contravention of its express wording and purposes. However, users of a ROW must similarly abide by the express terms and intent with which the ROW was granted. While compliance with provincial and municipal bylaws, and trespass violations, are generally matters for municipal or police enforcement, the abuse of a ROW can also lead to court-ordered remedies and damage awards in favour of the owner of the land on which the ROW is located.

James R.G. Cook

James Cook is a partner at Gardiner Roberts in Toronto and has been with the firm since he articled there in 2002. As a litigator in the firm’s Dispute Resolution Group, he has experience in a broad range of commercial, real estate and professional liability litigation. Phone 416-865-6628; email jcook@grllp.com. This article is provided for educational purposes only and does not necessarily reflect the views of Gardiner Roberts LLP.

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Many people have had to reflect on new ways to generate income to make ends meet and cover their mortgage payments. Others may be hoping to eke out some financial return from an existing but little-used recreational property or may be looking to buy an investment property that might be used to generate a source of income.

For each of these purposes, one possible option is jumping into the short-term housing rental market. This involves listing all or part of one’s home, condo or rental apartment on various internet-based platforms that advertise rental accommodation, such as Airbnb, Booking.com and Expedia, or through advertising in local media.

The Ontario government initially banned all such rentals during the early part of last summer, but that ban has subsequently been lifted.

The problem is that for properties in the City of Toronto, the rules around hosting, offering or providing short-term rentals are not as free-wheeling and flexible as they were previously, or as one might hope.

Here are some of the key points:

Registration required:

There are new rules that came into force on Sept. 10, 2020.

Prior to offering listings, short-term rental operators must first register with the city and are subject to various administrative constraints. These arise under new regulations that cover rental arrangements of this type and aim to create a more even playing field by legalizing rentals that comply. (Note that those individuals who want to offer rentals of 28 or more nights at a time need not register with the city).

The annual registration currently costs $50 and can only be paid online via a valid credit card.

Each of the short-term rental platforms must obtain a license with the city before it can operate.

No more “ghost hotels”:

Secondly, an owner or landlord cannot list a property on short-term rental sites – whether freehold home, apartment or condominium – unless it is his or her principal residence. When the unit being offered is a rental apartment and is already subject to a lease with a landlord, it will be important for the tenant to obtain the consent of the landlord first.

For these purposes, a principal residence is a “dwelling unit owned or rented by an individual person, either alone or jointly with others, where the individual person is ordinarily resident.” In plain language, it’s the residence where the rental host/operator actually lives, and is the address listed on his or her taxes, insurance policy and utility bills.

This stipulation around principal residency avoids the previous proliferation of “ghost hotels”, which involves buildings or units offered for short-term rental by an operator who does not live on the premises.

Municipal tax and other obligations:

The new regulations also impose specific administrative obligations on those individuals who want to offer their properties for rent online. These include:

• Requiring him or her to display the city-granted registration number on all advertising and listings for their rental unit or building.
• Obliging short-term rental operators to collect a four-per-cent Municipal Accommodation Tax (MAT) from renters, for stays lasting 28 nights or less. Starting Jan.1, 2021, the short-term rental platforms like Airbnb are themselves obliged to collect and remit the MAT to the city. (Again, operators who only offer rentals of 28 or more days are exempt from this obligation).

Other specific restrictions: In addition to the mandates above, there are a few additional restrictions that pertain to specific circumstances:

• A short-term rental can comprise an entire residence, or up to three bedrooms within a principal residence.
• Secondary homes, recreational properties, investment properties and vacation rentals cannot be registered as short-term rentals in the city; they can only be rented out for longer-term periods of 28 days or longer.
• For those who want to rent out their entire Toronto home, there is a maximum cumulative duration: It can be rented for a maximum of up to 180 nights per calendar year. However, hosts can agree to rent up to three bedrooms in a unit for an unlimited number of nights per year.

Are guests considered “tenants”?

Legally, short-term renters are something of a hybrid class of occupant. The question arises whether they are considered “tenants” under the provincial Residential Tenancies Act, and therefore entitled to some of the rights and protections that legislation affords.

Generally speaking, the short answer is no, especially if the short-term rental involves just a room or two within the home that is a principal residence. However, the situation is less clear for rentals of an entire home, particularly if the rental duration is longer than a month. In this kind of scenario, it may be wise to get legal advice on the various obligations that can arise for both the individual homeowner and any renters, and on whether the Ontario government’s suggested Standard Form Lease should be used.

The takeaway:

As this article shows, there are many new and complex restrictions in connection with short-term rentals in Toronto. If you are thinking of putting all or part of your Toronto home on a listing like Airbnb, review the costs and other rules and regulations before hopping into the short-term rental business.

Martin Rumack

Toronto lawyer Martin Rumack’s practice areas include real estate law, corporate and commercial law, wills, estates, powers of attorney, family law and civil litigation. He is co-author of Legal Responsibilities of Real Estate Agents, 4th Edition, available at the TREB bookstore and at LexisNexis. Visit Martin Rumack’s website.

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Tourism here generates a whopping $102 billion in annual economic activity. This spring, the federal government unveiled its new tourism growth strategy to help push that number even higher going forward.

REM recently attended a media briefing hosted by Hilton to discuss its role in this country’s economic, business and tourism growth. The focus was on the all-suites brands by Hilton. The hospitality giant is investing heavily in this model, particularly in Canada, where the all suites format made significant headway last year and is slated to be a growing presence. The event was held at the newly opened Home2 Suites by Hilton Toronto Brampton, which is paired with a Hilton Garden Inn.

It’s a double first for Hilton in the Toronto region – both the company’s initial dual-branded property in the area (the premise being that dual-branded hotels provide more versatile options for both business and leisure travelers), as well as the first Home2 Suites by Hilton there. (An all suites, affordable, extended-stay hotel option, Home2 Suites was identified at the media event as one of Hilton’s fastest-growing brands ever.)

Bill Duncan, global head of Hilton’s all suites and focused service categories, said in a news release that the GTA was selected for this particular hotel launch because its “diverse culture and rapidly expanding tourism industry” make it a perfect location to further expand Hilton’s brand footprint in the Canadian market.

The stage has already been set for future growth, with over 20 per cent of planned Hilton properties in Canada being in the all-suites category. The strongest markets for Hilton here are Ontario, Quebec and British Columbia, says Alan Roberts, global head of Embassy Suites by Hilton.

There are 17 brands under the Hilton umbrella, offering tiers of rates, services and amenities, ranging from Waldorf Astoria at the high end, to more affordable choices including Tru and Hampton by Hilton.

The all-suites brands are Embassy Suites by Hilton; Homewood Suites by Hilton; and Home2 Suites by Hilton. The all-suites hotel concept (wherein all guest accommodations are suites, incorporating a separate living space and kitchen facilities) lends itself to international and domestic business and leisure travelers alike, who enjoy the added space and amenities.

“We noticed customers asking for microwaves and fridges even back 25 years ago,” says Chuck Lodhia, vice president of JM Hospitality, which developed and manages the Brampton dual-branded hotel and various other Hilton properties.  So, when all-suites hotels came along, it was a “no brainer” for his company, he says.

It’s an under-developed segment here, making Canada a prime market, says Jeff Cury, senior director of development for Hilton, Canada. The lower dollar compared to the U.S.  doesn’t hurt either. Cury says that suite hotels are an area that is “showing tremendous growth and real opportunity” for the hotel industry.

Extended-stay, all-suite hotels are more established in the U.S. In Canada they are still somewhat misunderstood, with growing demand and plenty of opportunity for catch-up, Hilton officials say. Despite the name and the fact that they tend to be targeted to travelers staying five to 15 days, any stay length is acceptable, extended or otherwise.

It’s a concept that could be regarded as in some ways sharing market space with Airbnb. Certainly, a quick Google search indicates that competition between hotels and Airbnb is intensifying. Despite new stricter regulations, as Airbnb extends its reach and increasingly begins to target business travelers, hotels are more likely to be affected.

It’s not a simple equation though. It can be a bit like comparing apples or oranges.

“It’s two different businesses. They are rooms and we are hospitality,” says Adrian Kurre, global head of Home2 Suites by Hilton. “We think a big part of the hospitality experience is people connecting with people…. We stay focused on connection and creating memorable experiences. We need to make sure we deliver that light and warmth of hospitality, which was the position Conrad Hilton came up with when he formed the company – his vision.”

Canada has no shortage of suburban markets, which traditionally have been viewed as the extended stay bailiwick, although that has now evolved.

Also evolving are the building methods being used. Hilton opened its first modular-built hotel last year and expects modular construction to increasingly gain ground.  In this process, modules are built off-site and then shipped and assembled on location. This greatly speeds up building time.

“I think it’s the future of construction,” says Kurre. “I believe that in 15 years modular rooms will be the standard.”

Another milestone project for Hilton is its waste reduction initiative (in conjunction with the non-profit Clean the World), wherein used bars of soap from its hotels are collected and recycled into new bars.  “Hilton is recycling used bars of hotel soap to save the planet,” CNN Business reported. It was apparently among the first hotel chains to recycle soap, helping to keep it out of landfills.

Sustainability efforts are evident in other areas as well, including Home2 Suites by Hilton, the company’s “greenest” brand, with a commitment to the use of environmentally friendly products and operations, including low-flow toilets and landscaping featuring indigenous plants to minimize water usage.

Hilton prides itself on innovative development strategies that will meet the varied needs of its diverse clientele and aid in the continued growth of its international footprint, which prominently features Canada.

“The law of individual differences states that each person has different needs,” says Kurre. “It’s the same in this industry – every market is different.”

Susan Doran

Susan Doran is a Toronto-based freelance writer who has been contributing to REM since its very first issue.

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What are the rules for Airbnb?

Every city will set its own rules for renting out all or part of a property on Airbnb or other short-term rental websites. In Toronto, for example, it is expected that only a principal residence will be able to be used for Airbnb. You can either rent out up to three of your bedrooms, or you can rent out the entire home, up to 180 days per year. You will also have to pay $50 to register the unit with the city and charge a four-per-cent tax.

Are guests considered tenants under the Residential Tenancies Act of Ontario?

This is not a simple answer. If you are living in a home or condominium and you just rent out rooms to guests on Airbnb, they are not tenants and can be treated as a guest and must leave when you ask them to leave. You do not have to use the Ontario Standard Form Lease. However, if they are renting your entire home, even for a few days, an argument can be made that they are in fact tenants and you need to sign the Ontario Standard Form Lease, which will govern the relationship. It will make no difference if this is a furnished apartment or not.

Can you evict a tenant to turn the unit into an Airbnb?

The likely answer to this is no in Ontario. While an eviction is possible if you are converting the unit to a commercial use, it is not permitted when the business will be for Airbnb. It will also likely not be possible to evict someone using the personal use family reason and then trying to rent all or part of the home on Airbnb before one year after the eviction. This could lead to penalties under the act.

Can you evict a tenant who is renting your unit on Airbnb without permission?

The answer is likely yes. This would be considered either an illegal sublet if no permission was granted in advance and a violation of the act, in that the tenant would be subletting for more money than they are paying in rent. However, the landlord would have to start eviction proceedings regarding any sublet within 60 days of finding out.

Will insurance cover any damage caused by guests?

Airbnb and similar sites offer insurance coverage, but it is recommended that you also inform your own insurance company if you are planning to rent it out, since the risk of damage will increase. For example, if the guest and owner privately agree to extend their stay without going through the short-term website, the website insurance policy will likely deny any claim. Further, if damage occurs that was not caused by the guest, the owner’s insurance claim to their own company will likely be denied if they were not advised about the new use of the property.

Mark Weisleder - Senior Partner, RealEstateLawyers.ca LLP

Mark Weisleder is a senior partner, author and speaker at the law firm RealEstateLawyers.ca LLP. Contact him at mark@realestatelawyers.ca or toll free at 1-888-876-5529.

realestatelawyers.ca/

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Some Torontonians are opting out of the market to find greener (literally) pastures in the rural parts of Ontario. The math makes sense even if you decide to buy in rural Ontario and rent in Toronto. How? Homes, and therefore mortgages, outside of our urban centres are significantly cheaper than the urban core.  As an article reported in Toronto Life, if you Airbnb your cottage when you’re caught in the city, you will more than cover your mortgage and your Toronto rent.

There are, however, some caveats and critical legal and practical issues that may affect your decision.

Short-term rentals:

If you plan to put your cottage on Airbnb, be aware of noise regulations and open fire rules and your neighbours, who may not be pleased with short-term renters partying throughout the summer months. Especially if they’re out there to relax. Zoning restrictions, and not just noise by-laws, may also be in store for parts of cottage country. And don’t forget that your insurance will be sky high because you’re not living in the cottage and because you’re renting it out.

Financing:

Some other things to consider: many banks will only permit financing if the cottage has a furnace, a heated water line from the lake during winter months and a foundation in the ground and not on cinder blocks. Also, as further described below, ensure that the roads are maintained all year and that the property has a proper septic system and clean drinking water. If not, your lender may back out at the last minute. One wonders also wonders about the impact of insurance on homes near the water due to the flooding in Muskoka … stay tuned!

Easements:

Easements and rights of way are deceptively complex legal concepts and often the cause of litigation between neighbours. The point of most easements or rights of way is to ensure that adjacent properties are accessible or that views are protected. Sometimes these easements are noted on title, while in other cases they’re granted by legislation or arise out of implication. Often when there’s nothing in writing or on title, neighbours will litigate over whether or not such access rights exist. As such, if you intend on buying a cottage that needs access to its neighbouring property or if you want to protect a view, don’t assume these rights are protected. Confirm if these rights are registered on title. If not, you may be exposing yourself to unhappy neighbours or a lawsuit.

Unregistered hydro easements:

Unregistered hydro easements can be highly problematic because they permit the hydro authorities to cut through your land and prohibit you from building on the hydro easement. Case law and Hydro One’s policy requires homeowners to be financially responsible for the maintenance of wires and poles found on or near their property. To complicate matters further, such hydro easements are not found on title! You must contact the appropriate hydro authority to determine such easements.

Waterfront improvements:

Never operate under the assumption that the existing cottage or dock on a property is in line with bylaw mandates. Take, for example, a dock. The provincial Public Lands Act and federal Fisheries Act will apply if the construction of a dock impacts both the shoreline waters and fish habitat. This means that the construction of a dock may require not only municipal approval, but also federal and provincial approvals and permits. Ensure that these permits are in place before you purchase any oasis.

Property insurance:

Proximity to a fire hall can impact the rate charged for fire insurance. Typically, insurance companies focus on whether the structure is within five miles of a responding fire hall. In certain locales, insurers may not provide coverage, given lack of adequate fire protection. Get this information before an offer goes in.

Seasonal zoning:

While you may want to escape to your cottage year-round, it doesn’t mean that this is an option. Some rural residential properties are zoned “seasonal”, which means roadways are not maintained during the winter. Apart from no access during certain seasons, you may also be on the hook to provide and pay for maintenance. Seasonal zoning means that the municipality may not provide emergency services in the wintertime, which is cause for concern if you have elderly visitors or grandchildren.

Water supply:

If the water supply for the cottage is municipally provided, you’re in luck. Unlike most cottages that are supplied by well water, you don’t have to be concerned with potability. This is because there is no reliable potability certificate for well water, or water drawn from lakes or a cistern.

Wells supplying multiple properties may be subject to the Ontario Clean Water Act, and easements for pipes from neighbouring wells (if registered) may violate the Ontario Planning Act. As always, request applicable certificates and obtain warranties from the seller that the water supply is in accordance with all federal, provincial and local regulations.

Septic:

Septic systems require approval by the municipality or the Ministry of Natural Resources. Ask the sellers for such documentation. If you plan to make any additions to the cottage that affect the septic system, you are likely required to get additional approval to satisfy regulatory requirements. If you plan to rebuild and expand the cottage you plan to buy, ensure that such growth is permissible.

Natalka Falcomer

Natalka Falcomer is a lawyer, real estate broker and Certified Leasing Officer who started her real estate career in private equity. She created, hosted and co-produced a popular legal call-in show on Rogers TV and founded and recently sold Groundworks, a firm specializing in commercial leasing law. She is currently the Chief Real Estate Officer of Houseful.ca, leading the development and expansion of the company’s personalized home buying and selling experience for the Canadian market. She sits as an advisor on NAR REACH Canada and is the former multi-year board member of the Ontario Trillium Foundation.

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