Fair Trading NSW announced in a recent statement that all by-laws that restrict short-stay letting like Airbnb in apartment blocks were 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,” Fair Trading NSW said.
The recent amendment to Fair Trading NSW’s 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.”
By-laws that tell owners they must abide by local council zoning restrictions are also invalid, as only local councils can enforce their zoning, according to a government spokesperson.
“The local council ‘owns’ the zoning regulation,” the spokesperson said. “Only they can enforce it.”
But how do these clarifications affect apartment owners and investors 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,” said MadeComfy, a short-term property management specialist. “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 NSW that in the case of violations like overcrowding, noise, or disturbance of other occupants, complaints can be taken to the Tribunal to impose penalties.
How do councils deal with short-term letting?
While some councils have restrictions on short-term letting, they are only enforced on a complaint basis. A spokesperson for the City of Sydney Council said they’ve received very few complaints.
“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.”
The Berejiklian 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 a council basis.
Some of the proposed changes include having short-term letters acquire a license and pay a levy to cover the costs of providing additional security and maintaining the shared amenities used by guests. The state government may also impose a time limit on letters.
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