May 2020

Strata Law Update - Short-term letting in NSW

If you are offering your unit for short term letting through companies such as Airbnb and Stayz, take note of the latest legislative amendments.

From 10 April 2020, an Owners Corporation can pass a by-law (by way of special resolution) prohibiting a lot within that strata scheme to be used for the purposes of “short-term rental accommodation” if that lot is not the principal place of residence of the lot owner. See new section 137A of the Strata Schemes Management Act 2015.

A special resolution means that 75% of votes must support the proposal at a general meeting of the Owners Corporation.

“Short-term rental accommodation” is defined as a commercial arrangement which gives a person the right to occupy residential premises for a period of not more than 3 months. See section 54A of the Fair Trading Act 1987.

This means Owners Corporations can adopt a by-law to prohibit short term letting of units except for owner occupied units which can be let for less than 3 months if:

  • the owner is also in occupation (e.g. a spare bedroom); or

  • the owner is temporarily absent from the unit (e.g. on work or holiday).

The residential tenancy laws have also changed from 10 April 2020.  “Short-term rental accommodation” as defined above, is now clearly excluded from the Residential Tenancies Act 2010. See new section 8(1)(bb). This means that if you intend to rent out your property for less than 3 months, you cannot issue a residential tenancy agreement to cover this arrangement.

Owners Corporations should now review their by-laws and consider what changes they wish to make given the latest legislative amendments concerning short-term rental accommodation.

 

Authors: Melissa Potter and Irene Horan