Real Estate

Rentals ban: Ontario nixes vacation rentals during pandemic

Rental Sign Photo by Shutterstock/Zerbor

The pandemic has forced a rentals ban in Ontario.

On April 4, the Ontario government amended the Emergency Management and Civil Protection Act, banning short-term rentals during the COVID-19 pandemic. Specifically, the amendment states that “Every person who provides short term rentals in rental accommodations shall ensure that any rentals booked after April 4, 2020 are only provided to individuals who are in need of housing during the emergency period.”

Airbnb has also curbed their policies, banning all units that allow a party to take place during the pandemic and nixing any listing that tries to exploit the situation by marketing itself as a safe haven.

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While these measures are necessary to cull the spread of COVID-19, they have left cottage rental companies financially unstable. “Sales have gone down to virtually nil,” says J.T. Lowes, an employee with All-Season Cottage Rentals in Haliburton, Ont.

The company, which has 120 listings, has been cancelling bookings since mid-March. “We’re cancelling all the way up until June 1,” Lowes says. And while the company will continue to preach precaution and follow the necessary Ontario guidelines, the banning of short-term rentals has left the company unsure about how to approach future bookings.

“It’s really ambiguous with the wording they’ve used,” Lowes says, referencing the new regulation. “It leaves so much up for interpretation. Are we allowed to accept bookings now for the summertime?”

The bulk of the company’s income comes from summer rentals—late June to early September. “If it comes to the point where we’re not able to do any summer bookings, the impact is huge,” Lowes says. “We’d survive, but it would definitely be a huge blow. We’d basically be losing our entire income for that whole year.”

Not only will this impact the company’s earnings, but it will impact the cottage owners who use All-Season Cottage Rentals as a rental agency. Most of the company’s clients rent out their cottages for a couple of weeks each summer, using the auxiliary income to pay for general maintenance. A few of its clients, however, use the cottage as an investment property, trying to maximize rentals. “It will be tight for those owners because I know a lot of them rely on the income to help with the [rental] expenses,” Lowes says.

The company still receives the occasional rental inquiry, but it is not accepting bookings until after June 1. “We’re working through the bookings to the point of accepting the application,” Lowes says of their summer bookings, “but we’re not taking payment until about 60 days prior.” This company policy was put in place to avoid transaction fees in case the company does have to cancel and refund a booking.

Currently, All-Season Cottage Rentals is refunding the deposits of all bookings made prior to June 1. These deposits sit in a special trust account, so the company is not having to pay out of pocket, but Lowes says that “every booking we refund, we’re losing that commission that we would have received when the booking occurred. So, we’re definitely losing income each time we have to cancel a booking.”

The company is entitled to the general wage subsidy being rolled out by the federal government, but there are currently no government grants specifically designed to aid the vacation-rental industry. As a result, Lowes and other All-Season Cottage Rentals employees are working hard to help the company weather the current situation.

“Fingers crossed,” Lowes says.

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