Urban Living Suites boasts its’ Dundas St. West rental units are newly renovated, contemporary and comfortable.

But in January, Toronto fire inspectors found a “significant number of fire safety issues” in the 32 rooms they said were being operated as a hotel, a usage for which they were “not designed or constructed.”

The conditions were bad enough that fire department officials ordered the removal of paying guests, Deputy Fire Chief Jim Jessop said this week. More people were removed in March, after the owner continued to rent rooms in violation of the fire department’s “immediate threat to life” notice.

Today, the owner faces 10 fire code violations relating to insufficient exits, inadequate fire detection and lack of fire separations to prevent a blaze from spreading. The charges are currently working their way through the courts.

Welcome to Toronto’s short-term rental market facilitated by the popularity of web sites such as Airbnb which offer alternatives to traditional hotel accommodations. Like other municipalities, Toronto has struggled with how to regulate the industry. Later this month city staff will release proposed regulations intended to address the myriad of municipal issues this burgeoning business has created.

City regulations can’t come fast enough for Emma Voirin, who lives close to the Dundas St. West properties.

Parking, already a concern for local residents jockeying for spots in an area close to Toronto Western Hospital, is now worse, she says.

And in addition to seemingly never-ending construction on site, the owner installed four giant air conditioners in a laneway behind a row of houses, she says.

“When they are running, it becomes impossible to use our backyards or even open our windows.” A noise complaint filed two years ago to the city remains outstanding.

Inspectors have attended the properties on 10 occasions, including as recently as May 25. “They are not occupying as a hotel,” Chief Jessop said.

Urban Living Suites this week continued to list rooms for rent on several short-term rental websites. It’s unclear for what properties the rentals were listed.

In 2010, the owner, a numbered Ontario company, indicated it was expanding the number of “dwelling units” from five to eight inside the row of low-rise buildings at 779, 783 and 787 Dundas, west of Bathurst St.

The company is registered to Yen Ping Leung of Richmond Hill.

Her husband Michael Cheng and son Kevin Cheng are listed as directors of Ulto Property Group Inc., a “specialized web and traditional real estate investment and management firm” with a mission “to provide superior value to our stakeholders.” Ulto is the domain owner of two websites offering rentals at the Dundas St. locations.

Contacted by the Star, Kevin Cheng said “I don’t know too much detail,” but “we’re definitely going to do everything that complies with Ontario building code and fire code.”

When asked he denied running a 32-room hotel.

“No, that's the confusion too, right, our intent is still long-term rentals,” he said. “It's complicated when tenants lease out the property or do short-term rentals, and the landlord just lets it happen.”

He blamed the city for not providing enough “guidance” and said long-term tenants living in the buildings have, in the past, leased out their units.

Cheng acknowledged his family wanted to “capitalize” on the short-term rental market, but “it’s not the majority of their business.” As for the fire code violations, “we hired a consultant and the consultant is dealing with that.”

In an email, Michael Cheng, wrote “we have substantially cleared all fire violations…and await the fire inspector’s return.” And “we are working with our experienced team to ensure full compliance with all regulations, as well as hope to clarify any misunderstandings around the classification of our building.”

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Currently, 783 Dundas St. is unoccupied except for areas which were approved for use, he said.

Thorben Wieditz, a researcher with pro-regulation group Fairbnb, said this case shows that Airbnb is just one online rental platform that needs to be addressed, either with a city-wide licensing regime that forces vendors to display valid licence numbers online and on their doors.

“A package of regulations specific to short-term rental use would shine a light into what is now a gray area,” he said.