As from 10 April 2020, strata laws in NSW were amended to help assist owners corporations manage short-term rental accommodation in their building through platforms such as Airbnb and Stayz.
It is now possible for owners corporations to pass new by-laws which limit short-term rentals within their building or complex. Any such by-law will need to be adopted by special resolution, with at least 75% of votes supporting the proposal.
Importantly, short-term rentals can be prohibited if the property is not the principal residence of its owner. However, if the owner lives in the property then they will still be able to rent out their property (or parts of it), or while they travel.
Legal obligations of parties to permitted short-term rentals
Where short-term letting is permitted under the relevant legislation, owners and tenants alike must (among other things):
- not create a nuisance or hazard, either in the property or on any part of common property
- not interfere with the use and enjoyment of other people's housing or with common areas
- comply with all strata by-laws.
Practical tips to ensure compliance
Owners should take steps to ensure that guests:
- do not to make excessive noise
- do not block parking spaces reserved for other residents
- do not damage common property
- dispose of rubbish correctly.
Breaches of by-laws
If an owner or resident breaches a by-law, the owners corporation is able to serve a notice requiring compliance with the by-law after a majority vote to do so is held at a general meeting of the owners corporation.
NCAT action for refusal to comply
If an owners corporation issues a notice and the resident fails to comply with the by-laws then the owners corporation can commence action in the NSW Civil and Administrative Tribunal.
If a breach is proven to the required standard then NCAT can issue penalties of up to $1,100. However, if the offender is a repeat offender then the penalty can be increased to $2,200.
Further changes to come
The NSW Government and relevant stakeholders are currently finalising a Code of Conduct for the Short-Term Rental Accommodation Industry. Once finalised, the Code set out obligations for all parties involved in the short-term letting industry, including hosts, guests, online booking platforms and property managers/leasing agents. There will also be a stipulated complaints process dealing with breaches of the Code.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.