As of 10 April 2020, changes to the Fair Trading Act 1987 and the Strata Schemes Management Act 2015 mean that strata properties in New South Wales can now prohibit short-term letting where it is not an owner’s principal place of residence, through drafting of a new by-law.

This means someone who is living in a strata property as their principal place of residence will still be able to rent their home or a room while they are living there or temporarily go on holidays.

This new regulatory framework has been designed to find balance in allowing communities to continue to gain from the economic benefits of the short-term rental accommodation industry (STRA), this has seen a rapid expansion in recent years through platforms such as Stayz and Airbnb, while minimising any negative impacts on neighbours caused by problematic behaviour.

The changes will also see the introduction of a mandatory code of conduct and a complaints/enforcement system, which applies to anyone involved in providing or using short-term letting. This framework is due to come into effect in November 2021. It is anticipated that if hosts or guests commit two breaches of the code of conduct within two years, they will be banned for five years. This will help regulate any anti-social behaviour which interferes with the peaceful enjoyment of a neighbour’s home.

Common misconception

There is a common misconception that Airbnb and short-term letting only affects luxury apartment buildings in major tourist areas

Short-term accommodation letting is popular among young groups of travellers and backpackers as a cost-effective accommodation option, due to the ability to let low-cost apartments outside of the expensive tourist areas.

What can your owners corporation do?

These changes mean that your owners corporation can now adopt a new by-law banning short-term rental accommodation in certain circumstances. To successfully do this, the owners corporation will need to pass a special resolution at a general meeting of all owners (meaning no more than 25% of votes can be against the motion) agreeing to the making of the new by-law. From here, the new by-law needs to be registered with New South Wales Land Registry Services within six months.

How we can help

Kemps Petersons Legal (KPL) is part of the PICA Group family and are specialists in strata management.

We provide legal services to committee members and property owners by providing tailored and watertight by-laws to minimise risk and aid the smooth running of a harmonious community. We may also take care of the consolidation and registration process to ensure a comprehensive experience.

It is important that a strata specialist is used to draft your by-laws, taking into consideration your current registered by-laws, as well as your individual needs and specifications. This ensures that your owners corporation is protected by their professional indemnity for the services undertaken.

Know what is included

Not all by-laws are the same