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Short-term holiday letting council decision, not strata

By Sasha Karen

The opening of submissions for an options paper on short-term holiday letting has an Airbnb management business approving of the decision, and reiterates how strata and by-laws don’t dictate how you can short-term let your investment property.

A recent amendment has been made to NSW Fair Trading’s Strata Living document, which assists owners in understanding strata. One of the amendments states: “Strata laws prevent an owner’s corporation restricting an owner from letting their lot, including short-term letting.”

The document continues, saying the only way short-term letting can be restricted is by the local council.

This amendment has co-founders of MadeComfy Quirin Schwaighofer and Sabrina Bethunin happy, but this does not mean owners can just put their property up for short-term letting straight away.

The Strata Living document states that by-laws can request a 21-day period when a tenant is changing from short-term to long-term, or long-term to short-term.

“There is a model by-law that requires lot owners and occupants to notify the owners corporation at least 21 days before changing the use of their lot, such as short-term letting to holiday makers. This allows the owner’s corporation to make security, insurance and other necessary arrangements,” the document states.

Mr Schwaighofer also approved of this change, as he said this by-law should be taken on by stratas.

“That is something that … is always great and important to notify your strata or your building manager to make sure everyone is aware of what you’re doing,” he said.

Ms Bethunin agreed, stating the process is similar to long-term tenants.

“In the same way that you do with the long-term rents and every time you have a new tenant, you have to communicate with strata and keep them informed as well,” she said.

The NSW government is in the process of further figuring out short-term holiday letting laws with a new round of discussions, as the NSW Department of Planning and Environment released the Short-term Holiday Letting in NSW Options paper, which puts forward four potential options on what the law should be regarding short-term holiday letting.

These four options are to have short-term letting be:

  • Self-regulated within the industry, which uses Airbnb’s Friendly Buildings Program as an example that can control the number of nights property can be let and passing on contact information to the owners corporation and removes property from the service if rules are broken
  • Regulation by strata, which can give strata the option to have more power regarding adverse behaviour to lot owners and restrict the length of short-term letting in a strata environment
  • Regulation through integrating it into NSW’s development control system and by giving short-term holiday letting a concise definition
  • Integrated into a new registration system where short-term holiday letters have to acquire a licence or be registered

After consulting submissions, one, parts, or all of the above options may be introduced in the form of legislation.

For Mr Schwaighofer and Ms Bethunin, the government is taking the right steps forward, but there is still room for improvement.

As an example, Mr Schwaighofer would like to see some form of code of conduct introduced.

“[Currently,] there is no code of conduct that anyone has to comply with, … ‘I agree, I will not overcrowd my place. I make sure house rules are in place, and here is a person you can contact, and I can do something’,” he said.

If people break these rules, Mr Schwaighofer then believes with that much like how the long-term rental market has a tribunal that can issue fines, a similar tribunal should be introduced for short-term holiday letting.

“If you don’t comply, [you] can be put in front of the tribunal, and then depending on how you broke the rules, you pay a fine, and it will make people think twice if they want to break the rules or not,” he hypothesised.

“We think the government is moving in the right direction, listening to all the parties involved around strata and working forward, making the right decisions that include everyone,” Ms Bethunin added.

Submissions for the option paper are open until 31 October, and can be submitted via the NSW Department of Planning and Environment website through a submission form, or an online survey, or by mail.

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Short-term holiday letting council decision, not strata
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