Real estate sales representatives will not have to register as travel agents to work on short-term rentals.

The Real Estate Council of Ontario (RECO) and Travel Industry Council of Ontario (TICO) have come to an agreement after the latter took umbrage with real estate agents’ involvement with the short-term rental business, believing they’d overstepped. Under the new agreement, agents must transact the short-term rental through a registered real estate brokerage, and in doing so will remain compliant with the Real Estate and Business Brokers ACT (REBBA).

However, should agents peddle any travel services beyond the short-term rental accommodation, they will be required to register with TICO, and failure to do so will result in prosecution from either governing body.

Tim Hudak, CEO of the Ontario Real Estate Association, which was involved in negotiations, hailed the councils’ agreement and commended their teamwork.

“We played an important role in calling this to the attention of the regulator and cabinet minister responsible, who then put their heads together and came up with a sensible solution so that realtors doing short-term rentals under REBBA will continue to do so,” Hudak told REP. “But if they were selling water skiing packages or tourism at Marineland—items not related to housing—then they would be required to register under TICO.”

Hudak referred to additional regulation as unnecessary red tape, but also understood that TICO wanted to ensure the growth of Airbnb and other short-term rental businesses—which are relatively nascent and, at times, unregulated—didn’t encroach upon its jurisdiction.

Richard Smart, TICO’s president and CEO, previously told REP that the crux of the issue was third-parties involved in fixing short-term rentals.

“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. “

As former leader of the Progressive Conservative Party of Ontario, Hudak understands that bureaucracies can sometimes overlap and is pleased with the outcome, which still needs to be ratified under REBBA.

“Both agencies went to work together and found a sensible solution, as outlined in the bulletin, and in the long run they’ll need to make some regulatory changes to make this the solution one that will be long-lasting.”

Read the RECO bulletin here.