Introduction to TICO's Guidelines on Short-Term Rentals
The Travel Industry Council of Ontario (TICO) has noticed an uptick in businesses offering short-term accommodation rental properties, such as cottages, condos, and homes. These businesses may fall under the scope of the Ontario Travel Industry Act, 2002 and require registration. This guide simplifies TICO's guidelines to help determine when businesses dealing in short-term accommodation rentals are selling "travel services" and thus need to be registered with TICO. Please note that this is not legal advice, and for the most current information, consult TICO directly.
Understanding the Registration Requirements
The sale of short-term accommodation rentals can sometimes constitute the sale of travel services, requiring the transaction to be conducted through a TICO registered travel retailer. However, there are exemptions and specific scenarios where registration with TICO may not be necessary.
Key Criteria for TICO Registration
- Physical Presence in Ontario: Businesses with a physical presence in Ontario engaging in short-term accommodation rentals need to consider TICO registration.
- Real Estate Connections:
- Real estate brokerages registered under REBBA offering short-term rentals as part of their brokerage business may be exempt.
- Individual real estate brokers or salespersons must only facilitate these rentals through their registered brokerage to qualify for the exemption.
Exemptions Under Ontario Regulation 26/05
- Real Estate and Business Brokers Act (REBBA): Registrants under REBBA are permitted to engage in certain short-term accommodation rental property transactions, provided they are conducted through a registered real estate brokerage. This exemption is relatively new, reflecting existing practices recognized by both RECO and TICO.
TICO's Guidelines on Short-Term Rentals
The Travel Industry Council of Ontario (TICO) has noticed an uptick in businesses offering short-term accommodation rental properties, such as cottages, condos, and homes. These businesses may fall under the scope of the Ontario Travel Industry Act, 2002 and require registration. This guide simplifies TICO's guidelines to help determine when businesses dealing in short-term accommodation rentals are selling "travel services" and thus need to be registered with TICO. Please note that this is not legal advice, and for the most current information, consult TICO directly.
Understanding the Registration Requirements
The sale of short-term accommodation rentals can sometimes constitute the sale of travel services, requiring the transaction to be conducted through a TICO registered travel retailer. However, there are exemptions and specific scenarios where registration with TICO may not be necessary.
Key Criteria for TICO Registration
- Physical Presence in Ontario: Businesses with a physical presence in Ontario engaging in short-term accommodation rentals need to consider TICO registration.
- Real Estate Connections:
- Real estate brokerages registered under REBBA offering short-term rentals as part of their brokerage business may be exempt.
- Individual real estate brokers or salespersons must only facilitate these rentals through their registered brokerage to qualify for the exemption.
Exemptions Under Ontario Regulation 26/05
- Real Estate and Business Brokers Act (REBBA): Registrants under REBBA are permitted to engage in certain short-term accommodation rental property transactions, provided they are conducted through a registered real estate brokerage. This exemption is relatively new, reflecting existing practices recognized by both RECO and TICO.
Guidelines for Short-Term Accommodation Rentals
- Transaction Nature: The sale of accommodation for less than 30 days typically indicates a service for travelers or tourists, falling under TICO's purview.
- Agency Role: If a business acts as an agent for the property owner and collects customer funds or personal details, it's likely selling travel services.
- Accommodation Ownership: Businesses not owning the accommodations but offering them on behalf of another entity are likely acting as travel agents.
- Duration of Accommodation: Rentals exceeding 30 days may require case-by-case assessment to determine if they are intended for travelers or tourists.
Who is RECO?
The Real Estate Council of Ontario (RECO) regulates real estate professionals in Ontario under REBBA. They provide guidelines and oversee real estate transactions, including short-term rental accommodations. please see RECO’s site here.
Conclusion
This guide aims to clarify when businesses involved in short-term accommodation rentals in Ontario need to register with TICO. For detailed information or specific inquiries, contact TICO directly. It's important to remember that these guidelines are not exhaustive and do not constitute legal advice. Businesses should consult legal advisors for specific guidance on compliance with the Act and Regulation. The information provided by TICO is current as of its latest publication date but is subject to change.
