If hotel-type short term rentals are allowed in your co-ownership, any apartment owner who wishes to rent to tourists must take the following precautions. The most important one is to ensure that he abides to the Tourist Accommodation Act (the Act) and it’s Regulations. He will also ensure that he does not contravene municipal urban planning bylaws on uses. Some municipalities have adopted bylaws restricting or prohibiting hotel-type rentals. However, the majority of central districts Montreal boroughs allows this activity, which however will only be authorized in residences located in commercial areas.
Legislative framework
The Act applies to any person who offers publicly and on a regular basis (for remuneration), an accommodation unit (room or entire apartment) to tourists for a period (term) not exceeding 31 days. It can be, for example, for an overnight stay, a weekly or weekend rental. In such cases, the landlord is deemed to be the operator of a tourist accommodation establishment. Note that units offered on an occasional basis are excluded from the Act.
What is a tourist?
The Act defines the word "tourist" as: a person who takes leisure or business trip, or a trip to carry out remunerated work, of not less than one night nor more than one year outside the municipality where the person’s place of residence is located and who uses private or commercial accommodation services.
Classification certificate
A co-owner wishing to operate a tourist accommodation establishment must hold a classification certificate. Issued by Tourisme Québec, this document comes at a price. To get it, he will have to present a request to the mandatary appointed by Tourisme Québec, namely the Corporation de l’industrie touristique du Québec (Quebec Tourism Industry Corporation) (CITQ). The latter will send a notice to the municipality, borough or regional county municipality concerned. It will also specify the use which the owner intends to make of this classification. The municipal body receiving the notice shall, within 45 days, inform Tourisme Québec or its mandatary if the proposed use is not in accordance with municipal bylaws. In such cases, the request of the owner will be refused.
On the other hand, if he gets a classification certificate, be warned that it is valid only for a given period. The holders must display a plaque (sign) specifying the quality level of the accommodation offered. This classification indicates the number of stars awarded to the property. In the case of a housing complex, it should be displayed at the reception. It must display the name of the establishment, its classification and its rating level.
Municipal regulation
As previously mentioned, a co-owner applying to the CITQ for a registration number must include a compliance notice from the municipality or borough (e.g., for the cities of Quebec or Montreal). The purpose of this measure is to ensure that the planned operation does not contravene zoning regulations that may prohibit or regulate the operation of tourist accommodation establishments. Since the approach taken by municipalities or boroughs can be specific to each one, it is advisable to consult directly with the relevant authority.
However, no provision of a municipal by-law adopted under the Act respecting land use planning and development can prohibit the operation of a tourist accommodation establishment offering, through a single reservation, accommodation in the primary residence of the individual operating it, to one person or a single group of related persons at a time, and without serving any meals on-site.
If a municipality or borough wishes to prohibit this type of accommodation (categorized as "primary residence"), it must do so through a zoning by-law or a by-law on conditional uses, which must be adopted following a referendum process.
Finally, the co-owner-landlord must ensure that in the operation of their establishment, they comply with all municipal by-laws regarding nuisances, sanitation, or safety, under penalty of suspension or cancellation of their registration.
Fines
Landlords who rent their dwelling to tourists without a classification certificate, are liable to a fine of:
The minimum and maximum amount of fines under this Act are doubled in the event of a second offense and tripled for any subsequent offense.
WHAT YOU SHOULD KNOW! Anyone who rents at least one accommodation unit for a period not exceeding 31 days, regularly and through public advertisement, must obtain a classification certificate and collect the Tax on Lodging. For more information on these issues, consult the Interpretation guide to the Act and the Regulation on tourist accommodation establishments.
WHAT TO KEEP IN MIND: The Act does not impose any such obligation to those who rent on an occasional basis, that is to say, on an ad hoc and nonrecurring basis, without the support of any explicit advertising.
WARNING! The holder of a classification certificate must - during the document’s period of validity - subscribe a civil liability insurance policy with a coverage of at least $ 2 Million. This insurance will cover risks associated with the operation of the tourism accommodation establishment.
