Whether regulated or not, ‘short term letting’, ‘short term rental’ or ‘short term holiday accommodation’ (STRA) can be a source of friction between owners corporations and community associations and their residents in NSW, particularly during peak holiday periods.
One way an owners corporation and its residents can achieve certainty is to adopt a by-law regulating this activity. Such a by-law can prohibit an apartment from being used for STRA if the Lot is not the owner’s or the occupant’s primary residence. This means that an owner or tenant may still rent a room within their Lot on a short-term basis if they live there as set out within section 137A of the Strata Schemes Management Act 2015.
If you are a client scheme of Strata Choice at no cost to our clients, we have commissioned an STRA by-law for Strata Schemes as drafted by a partner law firm, Bannermans Lawyers. Click here to register your interest in an STRA by-law for your scheme.
Code of Conduct
In addition to a by-law, there is also a Code of Conduct (the Code) for STRA, empowering Fair Trading NSW with enforcement measures if there are breaches of its terms.
The Code provides detail for the rules for the conduct of all parties (including the booking services), a register of STRA properties and an exclusion register relating to persons and parties who have breached its terms and are prohibited from STRA activities (such a prohibition may be for a specified period).
You can find details on the Code of Conduct and the exclusion register on the NSW Fair Trading website. https://www.fairtrading.nsw.gov.au/about-fair-trading/legislation-and-publications/changes-to-legislation/laws-for-short-term-rental-accommodation
Owners corporations should also consider that some local Councils prohibit STRA. This is generally contained in the applicable Local Environmental Plan (LEP). An LEP is a document that sets out controls and guidelines for development in an area. It determines what can be built, where it can be built, and what activities can occur on that land.
Where such an LEP prohibition may exist, a Scheme could make a by-law that expressly refers to that condition. Despite this, Strata and community schemes should bear in mind that they may not permit STRA if their LEP expressly forbids the activity. Conversely, STRA in a residential building within the LEP may still be allowed as part of a Council’s development consent (either when the building was built or after).
Clarification on this conflicting situation, and the measures available to your Scheme, is best settled with specialist legal advice that your Strata Manager can arrange.
Disclaimer: The articles and comments in this publication are necessarily brief and general in nature and are not intended to be relied upon by any reader in dealing with a particular problem. Whilst all care has been taken in the preparation of this publication, the writer and the producers accept no liability for any omission or misguidance.