Canadian Lawyer

w w w . C A N A D I A N L a w y e r m a g . c o m J U N E 2 0 1 5 21 n the advice of friends, James Mosher set out last spring to explore two of Europe's popular cities by rent- ing reasonably priced, centrally located homes. "Afterwards we decided: 'Ya, this is not for us,'" says Mosher, who didn't feel com- pletely comfortable in other peo- ple's homes, which he had found through Airbnb — the hugely popular and suc- cessful online service connecting travellers with people willing to share their couches, rooms, or homes. As a lawyer, he saw Airbnb as something of an underground enterprise with many potential flaws, including hosts lacking any reputation beyond online comments, open- ing their homes to strangers, and no sig- nificant security. They spent a few days at a London flat followed by a few more days in a Paris apartment. "And then we went back to London and stayed in a hotel." Landlords, condo corporations, the hotel industry, and jurisdictions world- wide are struggling with how to deal with online rental marketplaces and the ever-expanding online sharing economy enabled through e-commerce. Some municipalities prohibit rentals of residential units for periods of less than 30 days, other jurisdictions don't allow sublet- ting if that income exceeds the monthly rent paid out, and some condo complexes contain restrictions within their declara- tions — the original guiding documents — or bylaws. What is missing is consistency. What is developing is a growing perception that the movement flouts the law. There are several services connecting people wanting to rent out their spaces to tourists. Airbnb, the biggest, is continually expanding and buying up competing com- panies. It was valuated at $10 billion last year when it closed a new investor and derives its income by listing available properties and taking a percentage of the income. In Canada concerns are emerging over how the short-term stays are controlled and, in larger cities, the impact that might have upon limited housing stock. Hotels and bed-and-breakfast organizations have argued short-term stays should be subject to the industry's taxes and rules. Landlords are worried about their premises being rented out to a revolving door of tenants and the impact that may have on their investment. There have been concerns that short-term visitors could transform a condominium complex's character. And governments are missing out on taxation revenue. "It's probably an area where people are getting into without fully acknowledging the risk they're taking," says Mosher, a partner with McInnes Cooper in Saint John, N.B. He reflects on his province's Condominium Property Act, which distin- guishes residential from commercial units. "If you're going to start renting out the room by the night, you're taking it out of the sphere of residential and taking it R E A L E S TAT E By Marg. Bruineman JEANNIE PHAN Moving target Rules, laws, and other controls over short-term rentals vary so greatly across the country, it's hard to address concerns over services like Airbnb. O The Issue Money

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