Profits earned through subleasing persist, disregarding the implementation of draft law number 31
Let's Talk About the Dark Side of Housing Markets
Subletting residential properties for serious cash might just be the silent villain jacking up rental prices, according to insiders in the rental biz. This seems odd considering a law passed last year that outlaws tenants from subletting their properties for a profit.
Take the platform, GetYourPlace, for example. User Marie-Clarisse Berger, who used it to find a pad in Montreal, was recently shelling out up to $839 per month for a room in a shared apartment. Another tenant, who wished to remain anonymous, has been paying a whopping $869 per month since April for their room in a building on Falardeau Street in the Ville-Marie borough. With seven others sharing the apartment, it's clear as day stars this is causing a rise in rent costs.
Eric Michaud, coordinator of the Comité logement Ville-Marie, sums it up perfectly: "These companies are renting out apartments that are already expensive on the market and then slapping on a premium."
However, since the adoption of Bill 31 in the National Assembly, subletting a residential rental property can't be used for profit. Tenants can still charge additional fees for providing furniture and services like electricity and internet, but these fees must be reasonable and not used to pocket extra cash from the sublet.
But if a landlord feels they've been ripped off because their tenant is subletting for profit, they can terminate the lease, says Eric Sansoucy, spokesperson for the Corporation des propriétaires immobiliers du Québec.
However, "the change brought about by this bill only applies to residential tenants," explains lawyer Daniel Crespo Villarreal. "From the moment these companies are considered commercial tenants, this bill does not apply to them."
GetYourPlace, which didn't respond to questions from Le Devoir, isn't the only sketchy company raising concern. Harrington Housing, which sublets furnished rooms in apartments worldwide, including hundreds in the Quebec metropolis, has also got everyone on edge.
Around 30 of these properties are tucked away in Olympic Village buildings owned by Capreit, where tenants complain about the non-stop comings and goings of students and young professionals temporarily claiming rooms in these buildings, which house an astounding 980 apartments.
After complaints about Olympic Village properties divided to cram in a non-compliant room, the Rosemont-La Petite-Patrie borough got in touch with Harrington Housing and sent out inspectors. In February, the company confirmed it had removed the additional, illegal room from the apartments in question, with no violations found during the inspection.
But tenants at the Olympic Village continue to deal with disruptions, sighs tenant Diane Audet. She's unimpressed by the presence of these apartments, each home to several students, and the vermin infestations plaguing the buildings. When a noise complaint is made about one of the units offered through Harrington Housing, the request is passed on to the company, leaving the tenant frustrated at their lack of responsiveness.
Capreit, for its part, assures that tenants of the units offered by Harrington Housing in the Olympic Village must follow its "community rules." It also states that the leases signed in these apartments have a minimum duration of 31 days to comply with the rules regarding short-term rentals, which are forbidden throughout the Rosemont-La Petite-Patrie borough, except on Plaza Saint-Hubert.
"This isn't about short-term tourist rentals," Capreit insists, stating it intends to continue doing business with Harrington Housing.
For Further Reading:
- Investigation | When subletting is exploited by businesses
- Investigation | Some landlords have tenants sign vacation rental contracts instead of leases
- QS calls for changes to the Civil Code for vacation rental contracts
[1] https://www.leaf.org/en/publications/real-costs[2] https://www.hud.gov/program_offices/hsg/mfh/rhc/landlords/subleasing[3] https://www.nytimes.com/2019/12/23/nyregion/airbnb-brooklyn-tenants-eviction.html[4] https://www.washingtonpost.com/news/wonk/wp/2019/08/12/airbnb-landlords-are-running-illegal-hotels-in-every-large-us-city/[5] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7267615/
It's a jungle out there, folks. Stay informed!
- The government's policy-and-legislation regarding subletting residential properties in Quebec, as outlined in Bill 31, prohibits tenants from subletting for profit.
- However, the rise in rental prices in the housing-market, such as the example of GetYourPlace, suggests that some companies may still be engaging in such practices, despite the law.
- In the case of commercial tenants, like Harrington Housing, the legislation does not apply, leading to concerns about exploitation in the real-estate sector.
- The general-news is filled with investigations highlighting cases of subletting being exploited by businesses, and there are calls for changes in policy-and-legislation to address this issue, particularly in vacation rental contracts.
