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Toronto’s short-term rental market has transformed into a tightly regulated ecosystem—one where a precise, compliant, and enforceable short term rental contract separates professional landlords from risky operators. With new municipal enforcement measures, CRA deduction limits, and zoning restrictions in effect, Toronto landlords can’t afford to rely on outdated templates.
At AVS Hospitality, we specialize in creating and managing short term rental contracts that keep properties compliant, profitable, and well-run. Whether you manage a downtown condo, a duplex in Midtown, or a fourplex near transit, the right contract is the foundation of sustainable rental income in 2025.
Why the Short Term Rental Contract Matters in Toronto
A short term rental contract is more than a hospitality formality—it’s your property’s legal armor. It defines your relationship with guests, establishes payment expectations, limits liability, and proves compliance with city bylaws.
Toronto’s Short-Term Rental Bylaw restricts short-term rentals to principal residences only, limits stays to 28 consecutive days or less, and requires all operators to register annually with the city. Each listing must also display a valid registration number and collect an 8.5% Municipal Accommodation Tax (MAT).
If your short term rental contract doesn’t align with these provisions—or fails to disclose your registration number—you could face penalties or lose your license altogether. It’s a small but powerful document that determines whether your rental business runs smoothly or risks fines and suspensions.
New CRA Rules: Why Contract Compliance Affects Your Taxes
The Canada Revenue Agency (CRA) introduced major changes for 2025: any period your property operates without proper municipal licensing or registration disqualifies your ability to deduct expenses such as mortgage interest, cleaning costs, or utilities.
That means a missing registration number in your short term rental contract can translate directly into lost tax deductions. To protect yourself, your rental agreement must clearly demonstrate that your operations are compliant and ongoing.
Toronto’s enforcement capacity is also expanding under Ottawa’s Short-Term Rental Enforcement Fund—a national program that gives cities new resources to audit and penalize illegal listings.
At AVS Property Management, we keep every property audit-ready. Each short term rental contract we manage includes the registration number, MAT details, and all disclosure clauses required by city and federal regulations. Landlords get peace of mind, knowing their compliance is built right into their contracts.
What Every Toronto Short Term Rental Contract Should Include
An effective short term rental contract should cover every operational and legal detail that protects both you and your guests. Here’s what Toronto landlords must include:
1. Identification and Property Description
List the full legal names of both host and guest, the property’s full address, and its registration number with the City of Toronto. For multiplexes, specify the unit (e.g., “Suite 3A, Upper Level”).
2. Term and Duration of Stay
Clearly define check-in and check-out times. State the rental duration in both days and nights. For compliance, specify that stays cannot exceed 28 consecutive days.
3. Rent, Deposits, and Fees
Include the nightly rate, security deposit, and cleaning fee. Toronto requires landlords to collect an 8.5% Municipal Accommodation Tax—your short term rental contract should explicitly state that you collect and remit this on behalf of the city.
4. House Rules and Use Restrictions
Outline policies on smoking, parties, noise levels, visitor limits, and quiet hours. For multiplex owners, emphasize noise reduction, shared hallways, and waste disposal expectations.
5. Liability and Insurance
Make sure the guest acknowledges that they are responsible for damages and that the landlord is not liable for lost property or personal injuries.
6. Compliance with Local Laws
Every short term rental contract should include a clause stating that the guest must comply with Toronto’s short-term rental bylaw, fire safety rules, and building codes.
7. Access and Inspection Rights
State that landlords or managers like AVS Hospitality have the right to enter the property for maintenance or emergencies with appropriate notice.
8. Termination and Dispute Resolution
Provide the right to terminate the stay immediately for illegal activity, unauthorized guests, or non-payment. Specify that Ontario law governs all disputes, settled in Toronto Small Claims Court or arbitration.
A strong short term rental contract prevents confusion, eliminates loopholes, and positions you to handle any disputes with confidence.
Multiplexes and the Short Term Rental Contract Advantage
Multiplexes—such as duplexes, triplexes, or fourplexes—require special consideration in short-term rental management. Shared spaces, multiple exits, and fire safety regulations make compliance more complex.
The Expanding Housing Options in Neighbourhoods (EHON) program has opened the door to more multiplex conversions across Toronto, but many newly legalized units must still meet fire separation and occupancy standards before qualifying for short-term rental registration.
At AVS Hospitality, we build multiplex compliance directly into our short term rental contracts. Each unit includes clauses addressing shared-area maintenance, noise control, guest behavior in hallways, and cleaning coordination across units.
For example:
“Guest agrees to respect quiet hours between 10:00 p.m. and 8:00 a.m. and to comply with building rules regarding use of common hallways, staircases, and waste bins.”
This kind of language protects both landlords and neighboring tenants while maintaining the building’s professional reputation.
How Professional Management Strengthens Your Short Term Rental Contract
Most landlords underestimate the time it takes to enforce bylaws and keep contracts updated. Between MAT filings, registration renewals, and bylaw changes, maintaining a compliant short term rental contract can easily become a full-time job.
That’s why many Toronto investors rely on AVS Property Management to handle it all. AVS integrates legal precision with operational excellence:
We prepare custom short term rental contracts tailored to your property type.
We track registration renewals, insurance, and fire inspections.
We handle guest communication, deposits, and MAT reporting.
We ensure that every clause aligns with city bylaws and CRA standards.
Our expertise is especially valuable for multiplex landlords who need consistent compliance across multiple suites. AVS ensures every short term rental contract under our management mirrors municipal and federal requirements.
Enforcement, Records, and Protection
Even the best contract is only as strong as its enforcement. Toronto is actively monitoring compliance, investigating unlicensed listings, and responding to neighborhood complaints more quickly than ever.
To safeguard your property, your short term rental contract should require guests to provide identification, agree to noise limits, and acknowledge your right to terminate the booking for violations.
At AVS Hospitality, we maintain an organized record for every property, including:
Signed short-term rental contracts
Guest ID verification
Proof of MAT collection and remittance
Photo inspections before and after each stay
Fire safety and licensing certificates
These files ensure that if the city audits your operation—or if the CRA reviews your deductions—you have full documentation ready to present.
The Tax and Reporting Benefits of a Strong Short Term Rental Contract
A detailed short term rental contract not only supports compliance but also simplifies tax reporting. Each booking provides a clear record of income, duration, and MAT payments, which helps your accountant allocate deductible expenses correctly.
The CRA now requires landlords to separate compliant and non-compliant rental periods for accurate reporting. With AVS’s managed documentation, you’ll always have timestamped evidence that your property was properly registered and operational.
Every AVS owner report includes a summary of all short term rental contracts, guest payments, and municipal taxes remitted—making year-end accounting effortless.
The Future of Toronto’s Short-Term Rental Market
Toronto’s short-term rental market will continue tightening in 2025. Expect stricter rules around data sharing between platforms like Airbnb and the city, shorter complaint response timelines, and automatic suspension for repeated bylaw violations.
However, the rise of legal multiplex conversions presents new opportunities for landlords who stay compliant. Smaller, code-approved multi-unit properties can generate excellent yields through a mix of long-term and short-term rental contracts—especially when managed professionally.
AVS Hospitality stays at the forefront of these trends. We adapt every short term rental contract we manage as regulations shift, ensuring that our clients never fall behind the curve.
How to Get Started with AVS Hospitality
If you’re ready to upgrade your short term rental contract Toronto strategy, AVS Hospitality can help. We offer:
Complimentary contract reviews and compliance audits.
Custom short-term rental agreements aligned with Toronto’s latest bylaws.
Full-service property management for multiplexes, condos, and furnished suites.
Guest management, inspections, and tax-ready documentation.
Visit our Property Management Services page to learn more or schedule a free consultation.
Let us handle your short-term rental operations so you can focus on what matters most—growing your portfolio with confidence.
Key Takeaways
A short term rental contract is essential for compliance and protection in Toronto’s regulated market.
Contracts must include registration details, MAT clauses, and guest conduct terms.
Multiplex landlords face unique operational challenges that require specialized clauses.
CRA rules now link tax deductions directly to compliance—documentation matters.
Partnering with AVS Hospitality ensures every short term rental contract is compliant, enforceable, and audit-ready.
Final Word
A powerful short term rental contract isn’t just a document—it’s your shield. In 2025, Toronto landlords must treat it as both a legal requirement and a business asset. With the city enforcing stricter rules and the CRA tightening tax compliance, there’s no room for vague, outdated templates.
At AVS Hospitality, we transform that risk into reliability. Every short term rental contract we manage is designed to meet today’s regulations while anticipating tomorrow’s changes.
If you’re ready to protect your property, improve guest experience, and safeguard your returns, reach out to AVS Hospitality—your partner in smart, compliant property management.
Get in Touch
📞 Call: 647-294-5111
📧 Email: contact@avshospitality.ca
📲 Instagram: @avs_hospitality
▶️ YouTube: AVS Hospitality Channel
👉 Website: AVS Hospitality
