Can a town really tell you how many Airbnbs are too many? If you're in Ontario, the answer, at least for now, is a resounding yes.

Last week, short-term rental hosts across Ontario were hit with a reality check: Tiny Township’s controversial STR bylaw was upheld in court. In a decision handed down by Superior Court Justice Howard Leibovich, the municipality’s cap on STR licenses and other regulatory measures were deemed entirely valid.

For anyone operating or investing in vacation rentals in Ontario, this ruling isn’t just about one township. It could set the tone for STR regulation across the province.

Why You Should Care About This Ruling

If you're a property owner, Airbnb host, or real estate investor in Ontario, you might be wondering: What does a small township ruling have to do with me? Everything.

The purpose of this post is to walk you through:

• What exactly Tiny Township's STR bylaw includes
  
  
• Why the court upheld it
  
  
• What this means for you as a host or investor
  
  
• How to stay compliant (and profitable) in a changing regulatory environment
  
  

What Happened in Tiny Township?

Tiny Township, located in Simcoe County along the southern Georgian Bay, isn’t new to the STR scene. With scenic views and lakeside properties, it’s a popular destination for weekenders and summer renters.

In 2022, the township passed a bylaw regulating short-term rentals. This included:

• A cap on the number of STR licenses issued
  
  
• Annual license renewals
  
  
• Specific rules around noise, parking, waste disposal, and occupancy limits
  
  
• A complaints-based enforcement system
  
  

Not everyone was thrilled. A group called Responsible Hosts of Tiny (formerly Tiny Township Association of Responsible STR Owners) filed a legal challenge, arguing the bylaw was excessive and unfairly restricted property rights.

What the Court Decided

On March 24, 2025, Justice Leibovich sided with the municipality.

“The role of the court is to determine whether the bylaws are rationally connected to legitimate municipal objectives. They clearly are,” he stated.

The judge affirmed that Tiny Township had the authority to regulate short-term rentals under its municipal powers, particularly in the interest of preserving community character and addressing nuisance complaints.

The association plans to appeal the decision, but for now, the bylaw stands.

The Bigger Picture: A New Era of STR Regulation in Ontario?

Tiny Township isn't alone. Municipalities across Ontario, from Blue Mountains to Prince Edward County to Toronto, are tightening the rules around short-term rentals.

Common themes include:

• License caps or quotas
  
  
• Primary residence requirements
  
  
• Strict zoning laws banning STRs in certain areas
  
  
• Penalties for unregistered listings
  
  

This court decision strengthens the legal standing of those municipalities, encouraging others to adopt similar frameworks.

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What This Means for STR Hosts and Investors

This ruling signals a shift toward stricter local control. Here's what you need to consider:

1. License Caps Are Legal

Expect more municipalities to explore caps on STR licenses, so, limiting how many STRs can operate in a given area.

2. Zoning Restrictions Could Expand

Residential areas might see bans or heavy restrictions, especially where residents complain of noise or parking overflow.

3. STR Permits Are Non-Negotiable

If your STR isn't licensed, it's vulnerable to shutdowns and fines. Now more than ever, compliance is key.

4. Legal Precedent Is Set

This court ruling gives legal weight to other municipalities looking to regulate STRs, even in the face of opposition.

5. Appeals Could Change Things: But Not Today

The case isn't over. Responsible Hosts of Tiny says they'll appeal. But until another decision is reached, the bylaw is enforceable.

How to Stay Compliant (And Keep Your STR Running)

At Lodge Compliance, we help STR hosts navigate exactly these kinds of rules. Here's how to future-proof your property:

• Secure your local STR license (and renew it on time!)
  
  
• Confirm zoning eligibility before purchasing or listing
  
  
• Register for tourism taxes and submit filings as required
  
  
• Create a neighbor-friendly property with clear guest rules and noise limits
  
  
• Stay informed with alerts on local policy changes and court rulings
  
  

Final Thoughts: A Warning and an Opportunity

Tiny Township just proved that municipalities can regulate STRs—and that courts will back them up when it's done right. For hosts, this is a wake-up call. But it’s also an opportunity.

Get ahead of the curve.
Stay legal.
Protect your income.

Don’t let regulations shut down your rental business. Let Lodge Compliance help you get licensed, file your taxes, and keep your property running smoothly—even as the rules change.

 Click here to get started and avoid the legal mess. Because in today’s STR world, being a responsible host isn’t just good practice—it’s the law.