Short-Term Rentals in Condos

If you are thinking about using a condo as a short-term rental, the first thing to know is that there are two separate layers of rules to be aware of:

• The building’s own governing documents
• The municipality’s short-term rental rules. 

A city may allow short-term rentals in general, but a condominium corporation can still restrict or ban them in that building. 

The Ontario Home Sharing Guide notes that if a condo’s rules are more restrictive than the municipality’s by-laws, owners and occupiers still have to follow the condo’s rules.

This page is a practical guide for condo owners and investors who want to understand where the upside is, where the risk is, and what to check before listing on platforms like Airbnb or VRBO. 

Quick Summary

• Two rulebooks apply: Condo rules and municipal rules.
• City approval is not enough: A municipality may permit short-term rentals, but your building may still ban them.
• Toronto is strict: Operators must register annually, can only short-term rent their principal residence, and are subject to annual compliance inspections.
• Mississauga also has tight rules: Operators need a licence, must use their principal residence, need $2 million in liability insurance, and condo operators need proof of board permission.
• The risk isn’t just legal: Condo investors also face enforcement, insurance, damage, and vacancy risk.

How Short-Term Rentals Work in Ontario Condos

Short-term rentals are classified as renting out a home or part of a home for a short stay through platforms like Airbnb, VRBO, or Booking.com. 

Ontario’s current rules define a short-term rental as a rental for less than 28 consecutive days, while Mississauga defines it as renting out your home or part of your home for no more than 30 days in a row.

Condos often treat STRs differently from standard long-term tenancies for practical reasons:

• Turnover: Frequent guest turnover creates more building traffic.
• Security: More guest turnover can mean more issues with keys, fobs, access control, and unfamiliar visitors.
• Amenities: High guest volume can increase wear on shared spaces.
• Neighbour complaints: Noise, garbage, parking, and rule violations tend to come up more in short-stay settings.

What Condo Corporation Rules Can Restrict or Ban

A condo owner does not get to use the unit in any way they want just because they own it. The source document points to three core governing documents that impact STR use:

• Declaration: Can define how the unit may be used.
• Bylaws: Can govern operational and administrative issues that affect owners and occupants.
• Rules: Can regulate day-to-day conduct and building use.

Condo corporations may:

• Prohibit STRs entirely: Some buildings do not allow them at all.
• Require minimum lease terms: Some buildings allow rentals, but only if they are for longer periods such as 30 days or more.
• Set operating restrictions: This can include guest registration, parking limits, key or fob rules, amenity restrictions, or occupancy-related rules.

Important Municipal Rules for Owners

Even if the condo rules allow short-term rentals, owners still need to comply with city rules.

Toronto Short-Term Rental Rules

Toronto’s short-term rental rules are tightly tied to the operator’s principal residence. 

The City says operators must register in order to operate, must renew registration every year, and can only short-term rent their principal residence. Toronto also says that if you live in a condo, you must ensure your condominium bylaws and rules allow short-term rentals. 

As of January 2025, all approved short-term rental registrations are subject to annual compliance inspections, and operators can face registration revocation if they violate the by-law. 

The City also requires emergency contact information and exit diagrams to be posted in the rental.

Mississauga Short-Term Rental Rules

Mississauga also limits short-term rentals to a principal residence and requires a short-term rental accommodation licence. The City states that operators need proof that the rental is their principal residence, $2 million in liability insurance, and if the unit is a condo, proof of condominium board permission. 

Tenant-operators also need proof that the owner authorized the short-term rental. The City conducts inspections and requires operators to include their licence number in ads.

Other municipalities

Other Ontario municipalities may require annual licences or inspections, and some may restrict short-term rentals in certain residential areas altogether. Investors should not treat “Ontario” as one set of STR rules. Local rules still need to be checked city by city.

Why Ontario Condo Corporations Have So Many Rules Tied to Airbnb and Short-Term Rentals

Condo living is shared living. A corporation has to manage common spaces, safety, noise, access, and resident expectations throughout the whole property. If a condo’s governing documents are more restrictive than the municipality’s by-laws, those condo restrictions still apply.

That means a condo corporation may impose rules such as:

• Minimum lease lengths: For example, no stays under 30 days.
• Owner or tenant registration: So the building knows who is occupying the unit.
• Guest limits: To reduce overcrowding and nuisance issues.
• Fob and key restrictions: To control building access.
• Indemnity or compliance conditions: To protect the building if guest activity causes problems.

Owners can also be held responsible when their guests or operators break the rules. Toronto is explicit that the registered operator remains legally liable for short-term rental activity even if a co-host, manager, or third party handles the listing.

The Biggest Risks for Condo Investors

Short-term rentals can generate higher revenue in some cases, but the risks are substantial.

Legal and Regulatory Risk

• Changing rules: Municipal rules change all the time, and condo boards can also change or enforce policies more aggressively.
• Licensing problems: Operating without the required city registration or licence can trigger fines, loss of registration, or forced shutdown.
• Principal residence limits: The current system in both Toronto and Mississauga is built around principal residence use, which cuts against the classic investor model of buying a separate condo purely for STR operation.

Condo Enforcement Risk

• Building bans: The condo may prohibit STRs even if the city permits them.
• Compliance action: Owners may face orders, chargebacks, legal fees, or pressure to stop operating.
• Operator accountability: Cities may hold the registered operator responsible even if someone else manages the listing.

Damage and Security Concerns

• Wear and tear: More frequent turnover usually means more strain on the unit and the building.
• Noise and complaints: Guest behaviour can create friction with neighbours.
• Building access issues: More keys, fobs, and visitors can create security headaches.

Insurance Risk

• Higher coverage needs: Mississauga requires proof of $2 million in liability insurance, and both city guidance and the source material point to the need for appropriate STR coverage.
• Coverage gaps: Standard condo-owner or landlord policies may not fully cover STR activity.

The Advantages for Condo Investors

There is still upside in the right setting, but only when the condo and the municipality both clearly allow it.

• Higher revenue potential: Short-term rentals can outperform long-term rent in high-demand areas.
• Flexibility: Owners may want occasional personal use of the unit, especially in seasonal markets.
• Niche market opportunities: Tourist and business-travel areas can still create openings where the rules permit them.

That said, in major condo markets, the investor should treat STR upside as conditional, not assumed. Make sure to familiarize yourself with Ontario’s Airbnb rules.

What to Check Before Buying or Listing a Condo as an STR

Before moving ahead, make sure to review all three of these:

• Condo documents: Declaration, bylaws, and rules.
• Municipal rules: Registration, licensing, principal residence limits, inspections, and insurance requirements.
• Insurance and building policies: Confirm what is required and what is excluded.

In the end, short-term rentals can work in the right setting, but only when the building, the municipality, and the numbers all line up.

This resource is for general educational purposes and should not be taken as legal advice.