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[Jimmy-T]

It’s funny how the whole holiday letting issue is shaking out a lot of strata and council laws, especially the unenforceable ones. And before we go any further, this is not about Airbnb – it just starts there.

A colleague was looking into a case that began with an apartment owner in the Blue Mountains west of Sydney, who makes about $40,000 a year from renting his flat to tourists when he’s not there.

One other resident in the block objected to having a steady stream of strangers coming and going so he reported the host to the local council.

The council threatened the Airbnb host with massive fines because the unit block was in a high fire risk zone.

Not having an up-to-date list of visitors might endanger the guests, they said, as well as firefighters who would not know how many people, if any, needed rescuing in a blaze.

OK, said the happy host, but that would be exactly the same if he had permanent tenants, so what’s the difference? Cut to council officers retreating, tails between legs, saying there would be no further action.

So far, so logical … except what’s missing from this picture is NSW strata law. Section 258 requires landlords to notify the owners corporation (body corporate) of any changes of leases or subleases.

To be fair, this is one of the most widely ignored parts of NSW strata law. But ironically, it’s also one of the few that carries penalties for non-compliance – namely a maximum fine of $550.

And considering fines are payable to owners’ corporation funds, you’d think NSW strata committees would be all over this potential revenue earner.

By the way, the law in this form only exists in NSW. There is no requirement to notify the owners’ corporation of tenancy changes in Victoria. In Queensland you have to supply the name and address of the tenant and the terms of the lease when it runs for six months or more.

Other states may have different regulations (and probably do, strata laws being what they are).

Back to the NSW laws and those $550 fines: why wouldn’t strata committees be keen to both get their strata rolls in order and make some money for minimal effort?

And isn’t this an easy way of curbing holiday lets in residential buildings where they’re not wanted? That was certainly suggested by former Fair Trading Commissioner Rod Stowe.

So what do you do? Quite simply, tell landlords they’ll be taken to Fair Trading for the obligatory mediation, then to the Tribunal (NCAT) for fines for every new resident who isn’t registered.

How do you find out in the first place? Cancel suspect flats’ electronic access keys and see who comes running when they can’t get into the building or up to their floor in the lift.

In the past, this law has been ignored because it was more trouble than it was worth. But now that fines are paid into NSW owners corporations (body corporates) it could be a nice little earner.

This column first appeared in  the Australian Financial Review.

 

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[Stevecro]

Jimmy, I cannot confirm for sure, but ‘short term’ lets may just be private agreements and nothing more. I am not sure whether the Australian Consumer Law (ACL) would cover you as most short term lets are just private transactions, in most cases you aren’t renting from a business with an ABN etc.

It’s the same if you rented any other possession of yours to someone else. E.g. I rent my lawnmower to you for a week for nominal fee of $50. I am guessing if someone is renting their unit out on a regular basis and appears to be running a business (without an ABN) it may be seen as a consumer contact under the ACL due to the volume of transactions etc.

This would be up to the Tribunal to determine. I could be completely wrong, as I am not aware whether short term lets are defined in other laws. I am happy to be corrected though.

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[Jimmy-T]

My City of Sydney zoning, including for the building going up across from mine, defines residential lets as 90 days or more and forbids anything less.

The fact that they blithely ignore those limits and want to encourage the rest of the state to follow them in their dereliction of duty is beyond belief and suggests that the Blessed Ms Moore (for whom I have voted in every election) doesn’t give a flying fandango about apartment owner-residents and would rather suck up to her trendoid constituency who would rather do what is cool than what is right.

Or maybe I haven’t had enough coffee yet … but here is the tangle of facts we have to deal with.

Fair Trading says strata schemes can’t pass by-laws banning STHLs (some lawyers disagree).

NCAT say they can’t impose fines for by-law breaches anyway.

FT says only councils can enforce residential-only zoning so you can’t even have by-laws that say you must obey the zoning (again, some lawyers say that is not true). 

Councils refuse to do the enforcing (ironic, since it was a fine for illegal letting in Balmain that prompted the whole debate in the first place)

The STHL industry is pouring hundreds of thousands of dollars into their campaigns because they know the buildings where they will get the most resistance – the well-manged and well-maintained ones – are also the ones where they can make the most money.

We know that Airbnb, who present like a social service but act like a highly politicised global corporation, have caused huge problems in other popular tourist destinations around the world.

We know that three university studies ion NSW alone have shown that holiday lets have a detrimental effect on rents and housing availability. Airbnb dispute these reports preferring the survey from their friends at the Tenants Union that said the opposite (BTW: Where did the impoverished tenants get the money for their report, you have to wonder).

Where does that leave us? Caught between politicians (God help us), the majority of whom have no dog in this fight because there’s no holiday letting in their constituencies, and the councils who, were this an actual war, would have been shot for desertion.

Either way, unless we come up with some effective way of defending our turf that counters the negative effects of whatever legislation transpires, we are all screwed. 

If you want to be alerted when anyone replies to your posts or responds to this topic, please register and login, then you will be able to subscribe to the topic. The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers. NB: Longer threads may spill over to additional pages - look for the numbers on the bottom right, under the last post.

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[Lady Penelope]

I totally agree JT.

We are caught not only between the politics – but also between the legislation.

The horrendous inconsistency between the various Acts as to the meaning of “residential property” just adds to the confusion.

Conveyancing law, tax law, GST law, strata law, tenancy law, etc all have a different definition of “residential property”. These laws generally make no reference to the term of occupation. 

Unless I am wrong, the only place where you see any reference to the term of occupation appears to be in some local council zoning laws.

For various reasons these are either not enforced or are inconsistently enforced. This begs the questions

(1) “Why have a zoning code if it is not enforced?” and

(2) “Are Councils afraid that they have created a zoning code that can be easily challenged and overturned if it was to be enforced?”

An interesting legal test will arise when a decision needs to be made as to which law must yield to another law.

This needs to be sorted out ASAP. 

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