GREEN LIGHT TO SHORT TERM LETS
In June 2018, after almost three years of consultation, the NSW Government released its proposals for the regulation of the short term letting industry, an industry that delivers an estimated $31 billion per year to the economy but significant distress and disruption to strata residents by so called ‘party houses’.
The proposed reforms include new planning laws, an industry Code of Conduct and new provisions for strata scheme by-laws and have been designed to ensure that local communities continue to gain from the economic benefits of short-term holiday letting, while protecting neighbours from anti-social behaviour.
So what does this mean for Australia’s near 2.2 million of unit dwellers – one of the most vocal of the industry stakeholders on this issue?
The reforms remove all restrictions on genuine ‘sharing’ enabling the renting of rooms when the host is present all year round. Commercial lets are sanctioned for up to six months each year in Greater Sydney, and all year outside greater Sydney.
Amendments to the Strata Schemes Management Act 2015 are anticipated to clarify that by-laws can prohibit short-term holiday letting for investor owned lots.
Owners Corporations can adopt these by-laws on a 75% majority vote. Not so easy then when an investor owns a proportion of a block.
New state wide planning laws are proposed:
- when the host is present short-term holiday letting will be deemed exempt development 365 days per year and no development application is required
- when the host is not present, short term holiday letting will be limited to 180 days in Greater Sydney, with 365 days allowed in all other areas of New South Wales
- Councils outside Greater Sydney have the power to decrease the 365 day limit to no less 180 days
According to the Minister for Planning and Housing Anthony Roberts, this is a carefully thought out limit. He said: “The 180 days a year limit approximately equates to weekends, school holidays and public holidays so we felt this was a fair and balanced approach”.
The Code of Conduct will:
- includes a ‘2 strikes and you’re out’ policy with hosts or guests, committing 2 serious breaches within 2 years, to face a 5 year ban and listing on the exclusion register
- address issues of noise, disruptive guests and effects on shared neighbourhood amenities
- apply to online accommodation platforms, letting agents, hosts and guests
- include a complaint system for neighbours, strata committees and owners corporations and a dispute resolution process to resolve complaints
- empower Fair Trading to police online platforms and letting agents and to approve the appointment of adjudicators to resolve complaints.
Platforms and property agents face significant penalties up to $1.1m if they fail to check the exclusion register prior to booking
A ‘strike’ will include any behaviour which unreasonably interferes with a neighbour’s quiet and peaceful enjoyment of their home.
The Code, its enforcement, the compliance system and the exclusion register will be funded by industry and is currently under development and in consultation with Government agencies, and industry and community groups. The reforms, when introduced, will be reviewed after a year of operation.
Strata Schemes are encouraged to review their by-laws on this issue.
More information in our July Newsletter »
Are you having problems with Airbnb tenants and short term holiday rentals in your strata building?
Clare Peacock is an experienced construction lawyer working on Sydney’s Northern Beaches. Clare provides practical, cost-effective building approval advice to property owners, builders and strata managers. Services include residential building disputes, body corporate issues and strata building problems.