A Toronto landlord is suing her tenants, the City of Toronto, and Airbnb for $1.6M after her downtown apartment was allegedly rented out on the online platform without her knowledge or permission.

In a statement of claim filed in late June, Allison Rasquinha, the owner of a studio condo on Adelaide Street West, alleges that her tenant, Michele Nicole Carter, entered into a lease agreement beginning July 1, 2022 that "explicitly prohibits" any sublets without express permission from Rasquinha. On top of that, the building's condo corporation itself prohibits leases for less than 12 months.

Despite those restrictions, Rasquinha says Carter's partner, Jose Cornejo Kelly, was issued a license from the City of Toronto on July 14 to use the unit for short-term rental purposes. Shortly there after, the apartment popped up on Airbnb. With over 30 reviews on the unit's Airbnb listing as of April 2023, it appeared the apartment had been rented out at least 30 times in nine months.

Rasquinha says she was told about the Airbnb listing by a third party in February, seven months after it was first listed. She confronted Carter at the time, who denied the allegations. But just over two weeks later, Rasquinha had gathered evidence proving the existence of the listing, and contacted Airbnb to alert the company to the unauthorized rental. The suit alleges that Airbnb "refused and failed to promptly remove the property listing from its platform."

"Airbnb conspired with Carter and Kelly to deceit the plaintiff and violate the condominium declaration thereby causing increased foot traffic, wear and tear, unreasonable noise, increased garbage, security issues and others at the property for which the plaintiff would be unjustly liable for," the statement of claim reads.

Attacking the problem from another angle, Rasquinha contacted the City on March 21, demanding a revocation of Kelly's short-term rental license. On April 2, it was finally suspended, the court documents say.

The suit accuses both the City of Toronto and Airbnb of negligent behaviour, saying both overlooked their responsibilities to verify the authorization of the tenants to rent out the unit. Both are accused of unjustly enriching themselves -- Airbnb from profiting off each booking, and the City from taking in dollars from licensing fees and taxes on rental income.

Rasquinha is seeking $1.6M from all four defendants for financial losses, mental anguish, rental value depreciation, and increased maintenance costs, among other issues.

The tenants, who reside in Hamilton, according to the suit, have not yet responded to the claims.