The Ontario Real Estate Association (OREA) and the Travel Industry Council of Ontario (TICO) are butting heads over whether or not real estate professionals need to register as travel agents if involved with short-term rental businesses.
According to OREA’S CEO Tim Hudak, TICO is overreaching by trying to make real estate professionals spend thousands of dollars to continue doing something he says they already do very well.
“This is an unnecessary piece of red tape,” Hudak told REP. “I suspect that with the growth of Airbnb and other short-term rental businesses, TICO wants to make sure their regulations create a level playing field, but, unfortunately, they’ve gone too far and scooped up realtors and brokerages that are already regulated under RECO with high professional standards and education.
“I’m confident that sensible heads will prevail and that we will find a way to eliminate this regulatory overlap and double licensing.”
Given that real estate professionals have been involved with short-term rental businesses for a while now, many are displeased with TICO’s proposal.
“This has caused anger and a lot of confusion from realtors who have done this business for some time and already adhere to very high standards for the profession,” said Hudak. “We do believe we caught this in the early stages, when it started to hit cottage country, and brought it to the attention of [Minister of Government and Consumer Services] Todd Smith and TICO directly, resulting in immediate halt.”
Indeed, Hudak and TICO President and CEO Richard Smart have had productive conversations, according to both men, and the latter has agreed to eschew enforceable measures, namely litigation, until the issue is further studied.
Both TICO—which administers the Travel Industry Act—and RECO operate under the same ministry and have collaborative mandates. Smart says that TICO is careful not to impinge upon the Real Estate and Business Brokers Act, however, the businesses in its crosshairs are registered with neither RECO nor TICO.
“Most of the business we’re coming across today that are involved in short-term business rentals are not registered with either regulator, so consumers are being done a disservice by not having regulatory oversight done by either of us,” said Smart. “We’re not running a campaign against short-term business companies or realtors—we’re not targeting these individuals.”
The Travel Industry Act stipulates that owners of properties who don’t use third parties to find tenants and handle day-to-day operations are exempt.
“If you’re renting it out yourself, like a person renting out a home, that is your business and has nothing to do with the Travel Industry Act. The only time TICO gets involved is when a middleperson is involved, who is renting out or selling a property—an end supply—that isn’t owned by that business,” said Smart. “So, if you’re a travel agency or short-term business renter and you’re renting out other people’s properties, then you would be caught under the Travel Industry Act.”
Smart added that Airbnb’s superhost program would fall under TIA’s umbrella if it were being offered in Ontario.
“If you want to rent your place out and you don’t want to deal with the public, you can go to a superhost, who will look after your, say, five other properties,” said Smart. “They’ll meet the renters, collect their money, give them the key and take a commission for the rental—those people would fall under our legislation.
“We watch Airbnb closely because this activity goes on in other parts of the world. They’re even exploring doing tours and packages that do stuff like that, and that’s close to being a travel agent. We’re not aware of that happening in Ontario yet.”