Holiday home investments under threat

In a landmark decision, the NSW Land and Environment Court has ruled that the short-term letting of a Terrigal home was found to be illegal. 

The case was brought in last month after a neighbour complained about loud noise coming from a property in the Central Coast town of Terrigal which was rented out for short periods, including a week or even weekends. 

According to Stacks Business, the neighbour told the court that noise from drunken parties next door was causing psychological damage to his family and therefore the property should not be rented out on a short-term basis. 

The case hinged on the definition of “dwelling house” as set out in residential zoning rules. The neighbour argued that “dwelling” entails a degree of permanent occupancy and that if the property is let out for parties on a regular basis, the owner is in breach of the Environmental Planning Assessment Act and needs approval from the local council.

Michael McHugh of Stacks Business, the lawyer representing the owner of the property, said that if noise was the problem then the neighbour should complain to police rather than seek to prohibit the owner from letting out their property on a short-term basis. 

“We argue a property does not have to have permanent residents to be considered a dwelling house,” Mr McHugh said, adding that if his client bought the property as an investment to let out to holidaymakers, and if she can’t do that, she would be ruined.

The owner, meanwhile, was unaware the property was being used for parties and has since asked renters to sign an agreement to prevent the problem from occuring in the future. 

“This case will have enormous ramifications for thousands of property owners up and down the coast who rent out their investment properties or holiday homes for short-term stays,” Mr McHugh said.

“It’s a big industry, not just for homeowners but also for local tourism.”

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