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By Quirin Schwaighofer • July 25, 2017

All Strata Building By-Laws Restricting Short-Stay Letting,  Declared Invalid

Fair Trading NSW announced in a recent statement that all by-laws restricting Airbnb and other short-stay letting in apartment blocks are invalid.

“Section 139 (2) of the Strata Schemes Management Act 2015 states that no by-law can prohibit or restrict the devolution of a lot or a transfer, lease, mortgage or other dealing relating to a lot,” according to Fair Trading NSW.

The recent amendment to Strata Living states that “Strata laws prevent an owner’s corporation restricting an owner from letting their lot, including short-term letting. The only way short-term letting can be restricted is by council planning regulations.”

A government spokesperson also highlighted that by-laws telling owners that they must abide by local council zoning restrictions are invalid as only local councils can enforce their zoning.

“The local council ‘owns’ the zoning regulation,” says the spokesperson, “Only they can enforce it.”

Fair Trading has already amended its Strata Living handbook to warn owners corporations and strata committees that they can’t pass by-laws restricting holiday lets.

What does that mean for owners and investors of apartments in building complexes with Short Term Rental bans?

As these bans are declared invalid, you are now able to freely choose between long or short-term rental options without checking on the by-laws of the building. Or, if you plan to rent out your apartment whilst on holiday, you can now do so without restrictions from by-laws.

It was also made clear by Fair Trading that, in case of violation like overcrowding, noise or disruption of other occupants, complaints can be taken to the Tribunal to impose penalties.

Quirin Schwaighofer, Co-founder and COO of MadeComfy says “We welcome this statement as rather than banning short term rental in general, the recommended way is to deal with non-complying property owners and guests. At MadeComfy we care a lot about our owners and guests, but also about their neighbours and community and hence we have even stricter house rules in place than most by-laws do. We also enforce these rules strictly and have a 24/7 service to act on violations.”

How do local councils deal with Short Term Letting?

Some councils have restrictions on short term letting, however, currently they are only enforced on a complaint basis. A spokesperson for City of Sydney Council – where residential letting is defined as three months or more – said they had very few complaints, two of which were currently being actively pursued.

“The City of Sydney reviews all complaints about illegal activity to determine what compliance action is needed. Priority is given to breaches that involve health or fire safety concerns,” said the spokesperson. “The City carefully addresses all reports about short-term letting but has received complaints from only a small number of people.”

A Waverley spokesperson said: “Where Council receives complaints that relate to the illegal use of a premises for short-term letting – including via Airbnb – council officers undertake an investigation that usually involves an inspection and making contact with the owner of the premises”.

These statements highlight the importance that you manage your guests and short-term rental proactively with a clear way of communicating and enforcing strict house.

The NSW government recently released a Short-term Holiday Letting in NSW Options paper for the discussion of regulating short term letting on a state rather than council basis.

If you have any further questions about this announcement and the feasibility of undertaking short-term letting in your strata building, feel free to get in touch with us and we're happy to explain or answer any further questions you might have.

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