NSW Fair Trading clarifies short-term rental changes

“Owners corporations are now able to adopt by-laws that limit short-term rental accommodation in their strata scheme, by not allowing it in lots that are not the host’s principal place of residence,” NSW Fair Trading said.

“This means if someone lives in a strata property as their principal place of residence, they will still be able to rent out their home or rooms while they live there, or temporarily go on holidays.”

Any such by-law needs to be adopted by “special resolution, with at least 75 per cent of votes supporting the proposal at a general meeting”, NSW Fair Trading clarified.

“Residential tenancy laws have been changed to clarify that from 10 April 2020, short-term rental accommodation arrangements of three months or less are not agreements covered by the residential tenancy framework,” it added.

Further, NSW Fair Trading said:

“Before adopting a new by-law to limit short-term rental accommodation, owners corporations will need to work with owners and residents to manage the transition for any pre-existing rental bookings or guests staying in the building at the time of making the by-law. If not, it is possible that when the by-law starts, a guest could be staying in a lot and the lot owner could be immediately in breach of the by-law.

“An option for owners corporations in drafting a by-law could be to allow any existing arrangements at the time of the start of the by-law to be completed. Alternatively, the by-law could state that it comes into force at a future date, to give lot owners and residents time to adjust to the change.”