SHORT-TERM RENTALS: IMPORTANT AMENDMENTS TO THE REGULATION RESPECTING TOURIST ACCOMMODATION ESTABLISHMENTS
Following an announcement by the Minister of Tourism on June 5, 2019, the Gazette Officielle du Québec published June 12, 2019, the draft Regulation modifying the regulation respecting tourist accommodation establishments (the “Draft Regulation” and the “Regulation”, respectively)[1].
According to the Minister, the update of the applicable regulations regarding collaborative accommodations, such as “Airbnb” and “HomeAway”, will result in greater tax fairness between Québec citizens and will allow them to legally benefit from technological innovations[2].
The Draft Regulation provides for the creation of a new class of tourist accommodation establishment called the “principal residence establishment” (“établissement de residence principale”). This category consists of an establishment where accommodations are offered, by a single reservation, within the operator’s principal residence to a person or single group of people together and where such accommodations do not include any meals served on-site[3].
According to the Draft Regulation, a principal residence is the residence where an operator, a physical person, resides on a regular basis and where its family and social activities are concentrated, including when the residence is not used as a tourist accommodation establishment, and whose address corresponds to the address provided by the operator to governmental authorities[4]. The Draft Regulation does not provide for a maximum number of nights that can be offered by an operator.
The operator of a principal residence establishment will be able to apply for and obtain its classification certificate provided by the Regulation, which will consist of a written notice including the establishment number, its category and its expiry date[5]. The operator must include the establishment number in any advertisement (including any website) and in any short-term accommodation agreement[6].
Pursuant to the Draft Regulation, if the establishment is located within an immovable held in co-ownership, the operator will be required to obtain and provide the authorization of its co-ownership syndicate in order to obtain its classification certificate. The same shall apply to an establishment governed by a residential lease: the tenant must obtain and provide the consent of its landlord.
What is notable is that the Draft Regulation removes the requirement that the unit is offered for rent to a tourist “on a regular basis in the same calendar year” from the definition of tourist accommodation establishment provided under the Regulation, which was open to interpretation. The Draft Regulation adds however that the availability of the unit is made public “by using any media”[7].
Once the Draft Regulation is in force, the short-term rental of a secondary residence will continue to be prohibited, unless such residence is converted into an official tourist accommodation establishment.
Bear in mind that fines between $500 and $50,000 for a physical person and between $1,000 and $100,000 for a business can be imposed in the event of the failure to comply with the Act respecting tourist accommodation establishments and its Regulation. Any interested person can provide his/her comments on the Draft Regulation in writing to the Minister before July 27, 2019.
Any interested person can provide his/her comments on the Draft Regulation in writing to the Minister before July 27, 2019.
By Émilie Therrien
[1] http://www2.publicationsduquebec.gouv.qc.ca/dynamicSearch/telecharge.php?type=1&file=70671.pdf and Chapter E-14.2, r. 1
[2] http://www.fil-information.gouv.qc.ca/Pages/Article.aspx?aiguillage=ajd&type=1&idArticle=2706055109
[3] Section 3 Draft Regulation: « établissements où est offert, au moyen d’une seule réservation, de l’hébergement dans la résidence principale de l’exploitant à une personne ou à un seul groupe de personnes liées à la fois et n’incluant aucun repas servi sur place »
[4] Section 3 Draft Regulation: « la résidence principale correspond à la résidence où l’exploitant, personne physique, demeure de façon habituelle en y centralisant ses activités familiales et sociales, notamment lorsqu’elle n’est pas utilisée à titre d’établissement d’hébergement touristique, et dont l’adresse correspond à celle que l’exploitant indique aux ministères et organismes du gouvernement »
[5] Section 6 Draft Regulation
[6] Section 11 Draft Regulation
[7] Section 1 Draft Regulation