Revenu Québec fines Montreal woman $3,750 for Airbnb she ‘unlisted’ years ago when law changed

Until three years ago, Montrealer Ashley Werhun occasionally rented the condo she shares with her fiancé on Airbnb when they were out of town.

In 2019, the Quebec government tightened the rules for short-term rentals, and Werhun then decided to stop renting his property. She hasn’t rented it since.

But in 2021, after a Father’s Day weekend visit from his stepfather, Revenu Québec fined Werhun $3,750 for having a listing for an unregistered Airbnb.

She received a fine notice a few months later in the mail. The Revenu Québec letter said it appeared she had a visitor over Father’s Day weekend and that inspectors later discovered her Airbnb listing online.

The letter also included photographs that inspectors had taken of his residence without his knowledge a few weeks after his stepfather’s visit.

Werhun doesn’t know how Revenu Québec learned of her father-in-law’s visit (she thinks it’s possible an unwitting neighbor filed a complaint), but it was this visit that prompted Revenu Québec to make a trace.

Even though her father was not a paying guest and she explained it to Revenue Quebec, she was still fined.

“It doesn’t matter if you actually rented it, it doesn’t matter if you didn’t make any dollars,” Werhun told CBC during an interview at the Montreal courthouse on Monday.

Her story highlights the frustration of many Airbnb hosts who feel unfairly targeted since Quebec toughened the rules.

Fines start at $3,750

The rule change that caused such consternation came in 2019.

It was then that Quebecers who rented their homes on a short-term basis (less than 31 days) had to obtain a registration number through the province at a cost of $50.

This number must appear on any advertising, contract or website related to the rental unit.

The province has been slow to start enforcing the law, but began strengthening enforcement in 2021 after hiring more inspectors. Revenu Québec has also stopped issuing warnings, instead moving directly to fines.

The fine for a person who fails to display their registration number correctly is $3,750, including administrative costs. If two people are listed as owners, each person is fined that amount.

The change has been lucrative for Revenu Quebec, with just under $3 million in fines imposed in the first 10 months of this year alone.

Hosts with old listings are still subject to fines

Where Werhun may have gone wrong was in the way she changed the status of her Airbnb listing when she stopped renting.

She says she “unlisted” her listing online, meaning it was removed from search results by Airbnb. No one could book it until she reactivated the ad. She said she had blocked dates for two years.

But Revenu Québec inspectors were still able to find traces of his registration online, and if a registration appears without a registration number included, a fine is automatically imposed. It doesn’t matter if you are not a tenant.

Airbnb offers several options for the status of its listings, from pausing and unsubscribing to deactivating and deleting an account. In July, after receiving the fine, Werhun permanently deactivated his account.

Airbnb declined to comment on Werhun’s case due to privacy policies. A spokesperson told CBC in an email that Airbnb actively encourages hosts to comply with applicable regulations.

Werhun said Revenue Quebec clearly punishes people who never intended to break the law and never realized they were breaking the law.

“Many citizens are fined for having old listings. So even if a listing was in 2005 or 2010, if they haven’t fully confirmed and deleted all account data, that still lives somewhere on the internet, unbeknownst to them,” Werhun said.

“If a citizen has a list from 10 years ago that he wasn’t even aware of, and it clearly showed that he wasn’t trying to evade the law, then it’s not not the person you should be looking to for your income,” she says.

Ombudsman says government message ‘confusing’

Werhun isn’t the only one frustrated. A Facebook group dedicated exclusively to complaints about Revenu Québec fines for short-term rentals has more than 300 members.

And in May, the office of the ombudsman of Quebec wrote a memo after receiving several complaints about fines perceived as unfair.

The ombudsman concluded that the province should have better explained its new rules.

“The Ombudsman has identified several discrepancies between the rules in force and the information available, discrepancies which could confuse citizens,” the report says.

The ombudsman gave the example of an online guide — and Quebec government ads that ran from 2013 to 2018 — that said it was mandatory to have a certificate for an Airbnb listing.

Then a new online guide and a press release from the tourism minister’s office came out in 2018 that suggested the certificate was optional if you listed your primary residence.

The rules changed in 2019, but the department didn’t update its online guide until 2021, so some people who viewed the guide in good faith might have been led to believe a certificate was optional, It was not the case.

The ombudsman also found that when people used online search engines to try to check the rules, they were often redirected to the 2018 departmental press release, which was also no longer accurate.

And the ombudsman noted that as of July 2021, Airbnb on its website still says the certificate is optional.

“In light of the problems identified, the Québec Ombudsman would like to emphasize the importance of the required guides being made available quickly on the government’s website, and that the department ensure that any obsolete information is removed,” recommends the memo.

A spokesperson for the Quebec Ministry of Tourism, Jean-Manuel Téotonio, told CBC in an email that the outdated press release and erroneous information from the online guide had been removed.

Téotonio said the ministry’s communication strategy during the law change included press releases, social media posts and postings on government websites.

“Key industry partners and ministry staff, who are in close contact with players in the tourist accommodation sector, also acted as relays,” Téotonio said.

But the ombudsman’s report suggests that’s probably not enough.

“This information will be directed to those who already follow these organizations on social media, which may not be the case for citizens who plan to offer their residence for rent,” the report states.

Why not a warning?

Werhun said that given this confusion and lack of clarity in the rules, Revenue Quebec should always issue warnings instead of instantly imposing fines on people.

“I think a disclaimer would be great for them to say, ‘Hey, looks like you have an unlisted property. Do you have intentions? There is a new law,” Werhun said.

She noted in her case, instead of a warning, that a few weeks after her father-in-law’s visit, Revenue Quebec inspectors came to her home and entered her property to take pictures. Copies of these photos were sent to her when she was informed of the fine.

“They could have knocked on our door and said, ‘Hey, looks like you have a visitor,’ and I would have said, ‘No, that’s my stepfather,'” Werhun said.

“It would have been a little more civil,” she said.

Mylène Gagnon, spokesperson for Revenu Québec, responded to CBC in an email.

“Certain omissions or actions by a tourist accommodation establishment operator constitute offenses punishable by fines,” said Mr. Gagnon.

“Revenu Québec ensures compliance with tax rules and obligations by carrying out inspections in the tourism sector,” she specified.

Online platforms and liability

The ombudsman also suggested in his report that Revenu Québec may be targeting the wrong people.

The ombudsman said accommodation platforms such as Airbnb should be part of the solution, pointing to the law in France and many other jurisdictions, where not only citizens but also the platforms themselves are fined if ads appear online without a registration number.

“Making all responsibility on the person who operates a tourist accommodation does not contribute to reducing the number of non-compliances generated by ignorance of the law”, states the report of the ombudsman.

The ombudsman’s recommendations aim to reduce the number of non-compliant registrations, in particular those belonging to “good faith but ill-informed citizens”, concludes the report.

Neither the Ministry of Tourism nor Revenu Québec will comment on this suggestion.

Despite feeling his fine was unfair, Werhun agreed to pay it when he appeared in court on Monday.

“I thought taking time off from work to attend a trial for that and what it would do to the stress level – it would be better to just pay it,” she said.

“You end up paying $20,000 in attorney fees. I can’t afford it,” she said.