Your Short-term Rental Side-Gig is About to Become a Real Business

Well, everybody, the jig is up. We’ve all had a good run, but the next time you think to yourself, “Hey, maybe I could make a few extra bucks renting out my condo while I’m away on vacay,” you’d better be prepared to peel off a few of those dollar bills for The Man. That’s right, Calgary Airbnb community: your local municipal government wants a piece of your short-term rental side-gig cash and is about to start charging you business licensing fees for the privilege of renting out your condo.

The New Short-term Rental Rules and Regs

Now, to be fair, it’s not as though we didn’t see this coming. We’ve written in the past about how the short-term rental scene has been, up to this point, something like the wild west of tenant agreements. We won’t start debating the pros and cons of short-term rentals today (click through the handy dandy hyperlink just ☝️ up there for that particular blog article), but suffice it to say that concepts and businesses like Airbnb shook things up pretty dramatically when they first burst onto the scene. It’s taken the powers-that-be a moment to catch up – but catch up they have, and changes are on their way:

  • Starting February 1, 2020, Calgarians will need to obtain a business license to rent out their property on a short-term basis.
  • Owners will be asked to navigate a tiered licensing system, according to the size of the property they’ll be renting out.
  • One-to-four-bedroom rentals will cost condo owners a $100 licensing fee, while larger property owners will be asked to pony up $191 in addition to an extra $104, for the now-mandatory fire inspection.
  • Additional stipulations include that no more than two guests may be lodged in the same room, every bedroom needs to have a window, the owner must post emergency contact information within the residence, and that overlapping bookings are a strict no-go.

With an estimated 6000 properties available for short-term rental in Calgary, these new licensing regulations should help to bring some regulation and accountability to the Airbnb marketplace here in YYC – in addition to providing the city with a bit of extra cashflow that doesn’t come from the wallet of your average Joe Taxpayer.

Your Building’s ‘bnb Bylaws

Hopefully, the above rundown gives all of our readership a good grasp on what the City’s looking for when it comes to short-term rentals – but what about when it comes to your own individual condo community? In requiring a business license to hustle your property out on Airbnb, you’re suddenly running a small business out of your condo each and every time you secure a new tenant. For many condo owners, this is neither here nor there – but if you intend to make a quick buck on Airbnb, be sure to check with your building before listing.

Some condo boards strictly forbid owners from operating any sort of business out of their condo unit, which means that while you may have been able to get away with short-term rentals before, those days might be heading towards a swift and decisive end come February 2020.

That said, peddling your unit out for short-term rentals is a far cry from the idea of “business” as your condo board may have envisioned it while initially penning its bylaw statutes (it’s not as though you’d be causing the daily ruckus and commotion that someone operating a hair salon or accounting firm out of their condo might!). If your condo bylaws do contain notes about business operation, it might be worth firing off a quick email to your board to see about sorting out an arrangement or revisiting those bylaws.

On the flip side, from the perspective of a board member, the pivot towards Airbnb rentals as businesses is certainly an empowering one, as it gives the board much more authority to govern or even shut down a disruptive unit’s ability to offer up short-term rentals, creating a level of accountability and potentially even addressing some of the ongoing concerns condo owners have about short-term rentals as a whole.

A Few Additional Points to Keep in Mind

Part and parcel with condo ownership is the understanding that you, as an owner, will work to abide by the board’s rules and regulations. There are plenty of condo owners out there who rely on that extra bit of short-term rental income to keep themselves afloat. Like it or not, resident financial stability isn’t a concern of any condo board we’ve ever run into. If you’re looking to continue renting your unit out, be sure to run a tight ship, properly screen and vet your tenants as best as you’re able and stay in good standing with the board on all matters Airbnb. As we mentioned in the section above, the shift towards short-term rentals as businesses gives condo boards much more authority over these comings and goings than they had previously, and if they don’t like what they’re seeing, you run the risk of being shut down – regardless of how that impacts your cashflow situation.

That said, we’ve always been all about transparency here at Catalyst, so it’s worth noting that there is something of a loophole, if your board happens to become drunk on its own newfound power and authority. Short-term rentals are defined by the City of Calgary as lasting 30 days or less – so, it follows that if you can snag a few longer-term short-term rentals, you can sidestep the whole business licensing issue altogether. Obviously, this may dramatically impact your ability to find and secure tenants, but some business is better than no business, right?

The move from short-term rentals as side-gigs to legit businesses is a bit of a complex one and comes with all the ups and downs you might expect. Be sure to go in knowledgeable, and don’t be afraid to suggest that your board review its bylaws if they seem to be relying on an outdated notion of what makes a business, well, a business. Want to learn about how you might be impacted come February 1, 2020? Reach out to the friendly, informative community over at Alberta Condo Owners for Change and join the conversation today!