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Let bylaws be bygones?

There is much debate around the subject of how much control (if any) strata bylaws can impose on lot owners to regulate, limit or even ban ‘Airbnb’ and other short-stay letting schemes. Most Community Title Schemes have a bylaw stating that no subletting of units, via platforms such as Airbnb, is allowed but there has been some ‘push-back’ from owners chafing at such restrictions.

In a landmark decision last year, the NSW Civil Administration Tribunal overturned a strata bylaw that banned a homeowner from renting her apartment on Airbnb. In Estens v Owners Corporation SP 118251, the applicant brought her application on the basis that the Owners Corporation did not have the power to pass the special bylaw restricting the ability of a lot owner to lease or otherwise deal with her home.

The ruling confirms that bylaws, even when they’re in line with local council residential-only zoning, are secondary to the strata law principle that they cannot “prohibit or restrict” the operation of a lot to be used in the same way as a ‘stand-alone’ dwelling can be.

New regulations

The NSW government has now introduced legislation in an attempt to address these issues of short-term letting.

The NSW legislation introduces a mandatory code of conduct which will apply to online booking platforms such as Airbnb, letting agents, property managers, hosts and guests. In addition to this, a complaints system will be established for neighbours of short-term rental accommodation, strata communities and owners corporations (in Queensland, bodies corporate). Amendments to the NSW body corporate legislation is also anticipated, to allow bodies corporate to adopt a bylaw (with a 75% majority), preventing short-term letting in their building if the unit is already leased and the short-term letting is being carried out by a tenant, as the host.

Recommendations have previously been made to the Queensland Government to regulate short-term letting and we can anticipate that any proposals adopted will include a similar code of conduct for hosts and guests along with a policy of a limited number of “strikes and you're out”. The Queensland Government is also looking to introduce a system of data sharing in the short-term accommodation sector to distinguish between someone who is renting out their own home and someone who is running a business.

In response to NSW’s proposed legislation, the Queensland Government has released a statement that it will be closely monitoring the response from other States and fully intends to borrow some policies that are decided to be the most effective, while still preserving the tourism opportunities presented by the short-term accommodation market.

All we can say, for the time being, is watch this space!

This article was written by Frances Kelly, Graduate, and Sharon O'Toole, Special Counsel. 

1[2017] NSWCATCD 52

"The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication."